Tale of Hindustan Motors

Hindustan Motors Limited (HML), India's pioneer automobile manufacturing company and Flagship Company of the C.K. Birla Group was established just before Indian independence, in 1942 by Mr. B. M. Birla of the industrialist Birla family. Commencing operations in a small assembly plant in Port Okha near Gujarat, the manufacturing facilities later moved to Uttarpara, West Bengal in 1948, where it began the production of the Ambassador. One of the original three car manufacturers in India, it was a leader in car sales until the 1980s, when the industry was opened up from protection. The company was dependent on government patronage for its sales and for survival by eliminating competition.

Since 1948, after HM opened its plant at Uttarpara, Uttarpara started developing fast, a Railway Station adjacent to the Hindustan Motors plant was established by the Government and named Hind Motor Station. It had a profound impact on the socio economic condition in that locality. A full-fledged township was built, having two schools, a hospital, shopping centres, bank, specialized sports academy, club, auditoria, lake, temples and other facilities which provide the much needed amenities not only to the employees but also to residents of the entire locality. Presently Hind Motor locality has 10 schools including 2 in the HM Township.

The company was the largest car manufacturer in India before the rise of MarutiUdyog. It was the producer of the Ambassador motorcar, once a mainstream car India, based on 1956 Morris Oxford series III and was in production for over 7 decades starting from 1957 till 2014. Production of the Ambassador ceased on 24 May 2014.

MarutiUdyog Limited was established in February 1981, though the actual production commenced only in 1983. Hindustan Motors got a big hiton its Toplinefrom the launch of Maruti800 by MarutiUdyog and triggered the gradual the downslide of Hindustan Motors Limited. Till the beginning of the 1980s, the Ambassador had a virtual monopoly of the Indian car market with a 75% market share. But by 1991, its share in the Indian passenger car market came down to around 20%. The recent scenario is graphically represented below.

Looking in to the emerging competition from other motors company the management of Hindustan Motors Limited tried different ventures to remain in the segment, but the incompetent management failed miserably. Brief of those as well as earlier ventures are given below.

General Motors Joint Venture

Hindustan and General Motors have had several tie-ups in the post-independence era to produce Bedford Trucks, Vauxhall Motors (1980 to 1990), Allison Transmissions and off-road equipment. In 1994, GM and Hindustan (C K Birla) formed a 50-50 joint venture, General Motors India to make Opel Astra cars which turned out to a disaster mainly due to the reputation Hindustan Motors has in India. The production of Astra was wound up within a few years. GM bought out the Halol plant, Gujarat from Hindustan in 1999.

Hindustan Motors Earthmoving Equipment Division

Hindustan motors used to make earthmovers, initially in collaboration with Terex, USA andFermac UK; and from 1984 with Caterpillar Inc. at the HMEED plants in Thiruvallur, near Chennai and Pondicherry. It was sold to Caterpillar in 2000 and HM quit the earthmover business. HML continue to be a joint venture partner with Caterpillar in Hindustan Power Plus, which manufactures diesel engines and generator sets.

Hindustan Tractors

The company began in 1959 as Tractors and Bulldozers Private Ltd and imported tractors. Manufacturing of tractors began in 1963, in collaboration Motokov-Praha (Zetor) of Czechoslovakia, and was known as Hindustan Tractors & Bulldozers Ltd. In 1967, it became Hindustan Tractors Ltd. The tractors were based on the Zetor tractor design and sold under the Hindustan brand. In 1978, Indian government formed Gujarat Tractors from the ailing company.

In 1999, Mahindra Tractors purchased 60% of the company, and in 2001, completed purchasing the rest of the company, renaming it Mahindra Gujarat Tractors Ltd.

Isuzu Joint Venture

Hindustan formed collaboration with Isuzu to manufacture engines and transmission for the Contessa in late 1980s at Pithampur near Indore, Madhya Pradesh. Initially the joint venture made a 4-cylinder G180Z 1.8L petrol engines and 5-speed transmissions. Later, a 2.0L Isuzu diesel engine was added to the production line to power the Contessa and the Ambassador. The technical collaboration lasted from 1983 to 1993. The Indore plant has since expanded to manufacture engines for a number of other manufacturers like Opel and Mahindra.

HML also assembled and sold a small number of Isuzu F series - JCS trucks in India in the early-mid 1980s. These trucks came from the factory with a fully built metal cabin which was not common with Tata and Ashok Leyland trucks at the time. They were well known for their reliability and fuel consumption, but were discontinued mainly due to falling sales poor service facilities and since HML could not sell them for an affordable price.

Mitsubishi Joint Venture

Hindustan has a joint venture with Mitsubishi that started 1998. The plant is located in Thiruvallur, Tamil Nadu and mainly makes outdated models wound up by Mitsubishi elsewhere like Mitsubishi Lancer Evolution X, Mitsubishi Lancer, Mitsubishi Cedia, Mitsubishi Pajero, Mitsubishi Lancer & Mitsubishi Outlander and current model Mitsubishi Pajero Sports.

After failure of all attempts by incompetent HM management to diversify or to launch a successful motor vehicle model, HM had no other option than to monetise a portion of its land bank,750 acres in Uttarpara, though the Left government initially opposed it but suddenly took a U-turn a gave a nod to it.  In 2006-07, HM had sold around 314 acres of the excess land at Uttarpara to Bengal ShriramHitech City Pvt Ltd, a real estate developer at Rs 2,86,44,00,000.00!! How could they? What was Left Government doing? Or Left Government and HM management worked hand in glove in this episode?

To understand Hindustan Motors in totality we need to have a brief idea of the Trade Union movement in Hind Motors factory also.

Brief History of Trade Union in Hind Motors Factory

Till 1990, almost 16,000 people worked at Hindustan Motors (HM). Among the unions there, it was CITU (Centerof Indian Trade Unions) that was most powerful. As a trade union, CITU was notorious for its internecine fights and factionalism throughout Hooghly district. Towards the beginning of the 90s, the then CITU secretary MaloyGhosh was murdered by a rival faction near HM station.Beginning in the mid-1990s, things began to change at the factory. The management decided to fire many workers, and Voluntary Retirement Schemes (VRS) were brought to the table to expedite the process. CITU opposed this move publicly, of course, but inside the factory it was a different story. They started negotiating for VRS. Many workers within their umbrella started expressing their discontent.It was at this time that a relatively revolutionary section of CITU formed the KarkhanaBachao Committee, led by GyanChakraborty. These were the same workers who had formed the SangramSamity in 1982, a faction that had survived within CITU, even winning a couple of internal elections. Correspondence was established between this force and DipokBakshi, Amitava Bhattacharya, and others like them who had been involved in student politics at one time and were connected with trade union movements at Relaxan, ICI, and other factories in Hooghly district. This correspondence provided the impetus for building a new, independent trade union. In this new phase, major initiative was taken, among others, by GobindoChakraborty – a member of workers movement at the factory and a veteran of the Naxalite movement of the 70s.

During that nascent stage, workers did not have the courage to build a new union, and so they contacted various experienced trade union leaders. An understanding was finally reached with GurudasDasgupta, the West Bengal secretary of AITUC and CPI member. The understanding was that because the majority of workers wanted a new union irrespective of party affiliations, the new initiative would not be affiliated to AITUC, but GurudasDasgupta would be its president. In 1997, an independent union free of party affiliations was formed – the SangramiSramikKormochari Union (SSKU). Its first president was GurudasDasgupta, and its first general secretary was LaxmiChakroborty. SSKU the union couldn’t really begin any major resistance. But when the company started laying off workers, SSKU went to court and was successful in stopping the process, thereby garnering support among workers. After this, SSKU started the movement against voluntary retirement (VR).

In the immediate background of this new phase of struggle, it had turned out that some leaders had reached personal understandings with the management, compromised, and accepted the VR scheme – in direct conflict with the position of the union as a whole. This was continued, as various unions except SSKU made deals with the management that were against the interest of the workers. Thus, SSKU made a demand for elections to decide who would be the “Trade Union Bargaining Agent”. After a lengthy court case, these elections were finally held in 2001-2002.The fury of the workers towards CITU, pent up for years, finally exploded. SSKU got 55% of the votes and was elected “Sole Bargaining Agent”. The union started expanding, and its activities increased. Part-time workers union and a union for convoy drivers were formed. Naturally, with this expansion came more forceful attacks from the management. Almost a 1000 workers were transferred to branches of HM in other states – a majority of them SSKU members. The aim was to push workers toward the VR scheme. SSKU took a stance of defensive resistance at this time – workers were told to accept transfer if necessary, but never to accept VR.Workers responded to this call from the union. And thus, even with mass transfers, the company’s VR scheme failed. The majority of workers accepted the transfers, but didn’t take VR.After this, SSKU placed a “Charter of Demands”. Among the demands, the most important one was to start DA. There were also a number of innovative suggestions for expanding the company, such as building water vehicles, rural transport vehicles, etc. But the company would not enter into dialogue. On the other hand, some leaders of SSKU showed the tendency to leave the resistance, although there was a constant fight within the union to keep vigilance on corruption and resist compromise with the management. Taking advantage of this situation, GurudasDasgupta pressurized the union to come under the affiliation of AITUC. In the meantime, elections had been held after two years and SSKU had been re-elected, getting 62% of the votes. The general secretary was DipakBakshi.

The Great "Guru" of strike Gurudas

After this, factional fights escalated within the union. Apart from compromising with the management, Gurudas Dasgupta increased the pressure to join AITUC. A new polarization was started within the union. Continuing this trend, the general secretary DipakBakshi was expelled, and Gurudas Dasgupta attempted to take sole control. But 90% of the executive committee of the union took a stand against this, and ultimately, GurudasDasgupta was himself expelled. The union organized a conference without him, and the new president elected was Amitava Bhattacharya. In the wake of this restructuring, the Gurudas faction attempted to spread the word that they represented “the actual SSKU”. Failing in this endeavor, they created a new union called SSU.

After parting ways with Gurudas Dasgupta and his followers, SSKU’s radicalism and resistance increased. And correspondingly, the management unleashed even greater attack. Events came to a crisis when on March 13, 2007, the management suspended 15 activists belonging to SSKU. An indefinite strike started at the factory, and continued for 61 days. During this struggle, SSU first took a position of support, but later joined forces with CITU to disrupt the strike. In 2007, CITU became the “Principal Bargaining Agent”with 49% vote in their favour, under the president ship of SantashriChatterjee, CPI(M) MP  from Serampore constituency(2004 – 2009). CITU pressurised to increase the DA and was done through a tripartite agreement with WB Government, CITU-SSU-IFTU and HML Management. Immediately after the agreement was signed management announced Voluntary Retirement Scheme (VRS) for employee above 53 years age. The name was voluntary but literally it was compulsory as 90% of the employees above 53 years of age had to accept it.

In 2011, with the fall of Left in Bengal and with so-called ‘Poribotoner’ government coming to power the employees started to show their affinity to INTTUC. INTTUC took the advantage of the situation and promised larger than life picture to the employees of HM – New Charter of Demand, modernisation of factory and not allowing management to roll out VR Scheme. The employee easily fall prey to it and in 2013 INTTUC became the “Principal Bargaining Agent” with 49% vote under the President ship of PinakiDhamali, Vice-Chairman of Uttarpara-Kotrung Municipality from TMC with Bidyut Rout as Vice-President and UttamChakraborty as General Secretary. After becoming “Trade Union Bargaining Agent” INTTUC told the employees of HM that they have persuaded HM managementto utilise the sales proceed of 314 acres of land for modernisation of plant, but quietly disappeared from the scene. After TMC came to power, they stalled Bengal ShriramHitech City Pvt Limited;in the mean time they have given clearance for it too!

                                                  Pinaki Dhamali in brown Shirt

HM has already gone to Board for Industrial and Financial Reconstruction (BIFR). Elaborating the status of HM, the company management said the company has already been registered with BIFR. "The first hearing of all stakeholders was held on September 15, 2014 where in all concerned have been instructed to file objections if any within four weeks and next hearing scheduled on February 25, 2015. No objections have been filed within stipulated period for the company to have been referred to BIFR. ICICI has taken a stake as a part of the corporate debt restructuring that we went through earlier this year. Our consortium of lenders has taken part in this restructuring exercise."

On 9^th November 2014, HM announced a voluntary retirement scheme (VRS) for the 2,200 permanent workers at the Uttarpara plant. The VRS announced entitles them to a lump sum payment of Rs 1 lakh plus other statutory dues like provident fund and gratuity. The last date for the workers to accept the VRS was November 20. "We have just launched the VRS Scheme. The scheme is applicable till November 20 and we will come to know how the employees have responded. As you know, we are taking this one step at a time. Once we know how the company will look like after the VRS, we will decide on the next steps. We are working with shareholders, the government and the unions on these decisions," said the HM management. INTTUC leader UttamChakraborty, who also works at the Uttarpara plant, said the VRS scheme may be the only way to save the factory since the main constraint was capital. Chakraborty said, “If the workforce is reduced, HM can team up with another firm and revive the business”!!!

On 27^th December 2014, one employee, Tapan Roy Sharma, who opted for VRS in November 2014 committed suicide for his inability to sustain with the money provided by HM Management through VRS scheme, Tapan was unable to continue his daughters study. In protest 150 workers of HM, irrespective of affiliation to their trade union as none of the Trade Union are keen to bargain on behalf of workers at present scenario, gheraoed the factory gate and started agitation on 28^th December 2014. Their main demand was Tapan didn’t commit suicide but situation to which the HM management has compelled him to undergo made him commit suicide, so HM management was wholly and solely responsible for his suicide. They demanded adequate compensation for Tapan’s family and immediately release Tapan’s 5 months pending salary. On 5^th January 2015, Factory Manager, Asim Kumar Basu, charge sheeted 5 of its workers - Laxman Das,ShyamYadav,Shankar Mandal, Dinesh Thakur and one other for protesting in front of factory gate on 28^th December 2014. It is clearly mentioned in the chargesheet that 100 people gheraoed the Security Guards and indulged into unruly anti-company activity. Is demanding adequate compensation an unruly anti-company activity? If at all charge sheeted, why only 5 workers and not all? Laxman Das happens to be the Treasurer of BJP, UttarparaMondal all other 4 are presently members of BJP. Is it management’s dirty politics to duck the payment of VRS amount for these five workers? In such a situation, where INTTUC, the Principal Bargaining agent, is not in the scene for workers, rather they are sympathetic towards factory management which is clear from UttamChakraborty’s (Gen Sec INTTUC HM Factory) comment stated above, the workers are fighting against inadequate VR Scheme, irrespective of their Trade Union affiliation.

So far, after going through the above mentioned, it is quite evidentto the readers that neither the HM management nor the Trade Union worked for the welfare of HM employees since 1983, be it CITU or SSKU or AITUC or IFTU or INTTUC. All were either making money or enjoying management provided facilities, but none were bothered about the employees.

Another VRS package was rolled out by HM Management on 22^nd December 2014 and the last date to accept the VRS is 15^th January 2015. The package offers each employee his balance salary dues (around Rs.45,000) plus encashment of earned and sick leave besides gratuity plus a Rs.1 lakh purse.For a person with 34 years of service, this works out to around Rs.4 lakh. Workers were peeved that amount was not linked to the number of service years left.

It is heard that the revival plan of Hindustan Motors hinges on the success of VR scheme. If it is so why the amount paid as final settlement to workers is such ridiculously inadequate? Is it possible for anyone to sustain with Rs 1 lakh for rest of his life?