Impact of Globalisation on Steel Industry

In the era of globalisation if any industry has been affected the most it is the steel industry. It is being constantly propagated these days that we have to compete in the world market. We have to improve the quality of products, decrease the cost of production and increase productivity in order to compete in the world market and gain profits. Everything is being decided today by market forces and there is no scope for working according to the old framework. A new work culture has to be developed and the system of production has to be made perfect. Non-productive expenses have to be done away with; only then is it possible to sustain independently. We have to find out ways of systematising our business without depending on governmental finance institutions. It is for this reason that a restructuring of the steel industry is absolutely essential, and so on. At first sight all this seems to be quite attractive and common people are ready to accept it.

SAIL has been slowly preparing workers to accept this scheme. In the beginning all employees were given special training through quality circles, where all this was explained. When most of them were convinced, in the second round, employees were encouraged to join the ‘suggestion plan’. Here it was required of any member of the quality circle to give ten suggestions as to what steps should be taken by the management so that cost of production could be minimised side by side with increased productivity. In order to get maximum participation, each participant would be given a steel bowl as gift whereas those whose suggestions were accepted would be given an entire set of utensils or any other costly gift. After successfully conducting this campaign, those technical workers were included in the training whose work-practice affected the quality of products. Through films, slides and transparancies, it was demonstrated as to how a slight lack of caution could lead to the quality of steel being affected. As a result of this training, workers’ consciousness was raised to a considerable degree and they would often discuss what they had learnt during work hours and work with heightened efficiency. Today we find that in Bokaro the production is higher compared to previous years, capacity utilisation having gone up to 103% and productivity having gone up to 75 tonnes per person per year.

Despite all this, monthly incentive and reward scheme, a system akin to productivity-linked wage, which is closely related to the production target, has also been started. This was a scheme which could be dated to pre-globalisation days. Now, this has been linked with quality, performance, cost control and productivity. Children are no longer entitled to free education, and much money is spent in sending them to English medium schools. Medical facilities have been curtailed and electricity has become dearer too. Today, much less is being spent in maintenance of the city. At the same time, safeguards in the plant are being done away with. The traditional criteria for determining bonus is being changed. The Government has stopped all economic aid so that all the steel plants of SAIL could develop their own resources and go for restructuring, This is how downsizing is being implemented everywhere.

Despite this, when SAIL was unable to achieve its declared goal, steps were initiated for modernisation. The modernisation bid was wrought with serious problems too -- there were global tenders at international rates, but all the work was done by local representatives. After the modernisation drive was over, SAIL got a survey conducted through the Mackenzie Consultancy Group. The group suggested that since SAIL was supposed to produce only steel, it should concentrate on that alone. The following proposals were made by it: to sell Rourkela Fertilisers, IISCO and Salem Stainless Steel Plant and form a separate corporation for the power plants of Bokaro, Durgapur, Bhilai and Rourkela and sell it (recently NTPC has expressed its desire to take over Bhilai, Durgapur and Rourkela power plants). It was also proposed that all products of SAIL be divided into two parts -- structural and flat products and the unit producing flat products be given over to a joint venture; the manpower of SAIL, which stands at 1,35,000 be decreased to 87,000. Through these methods profits could be accumulated and used for modernisation.

Although these plants have not been sold yet, all efforts are on to decrease the benefits and reduce manpower. In the last VRS, SAIL had achieved its target and the management hopes that reduction in manpower will be achieved easily too. The reduction in manpower is compensated through employment of workers on contract basis. Earlier these workers were only given cleaning or other unskilled jobs. But now they are even employed in skilled jobs like operation. Earlier, if a contract worker died in an accident inside the plant one of his dependents had to be given a job by BSL. But things have changed now -- in order to escape this obligation the system of issuing gate pass has been done away with. Rather only visitor passes and gang passes or entry passes are issued and workers are taken to different sites to work. Although SAIL is a public sector enterprise it has become a model for non-implementation of labour laws.

The other important point is that it is very difficult to ascertain which of the contractors are really getting the work done and which are those who are relatives of the officials or those with criminal background; since there seems to be a large number of young contractors inside the plant.

The SAIL has already started selling its self-declared surplus idle assets. In Bokaro, it can be clearly discerned that some of the established TUs are also party to this process. The present MLA of this area, who is also a TU leader, has acquired BSL land, residence and money in the name of starting an engineering college. AITUC leaders have taken over a school in which they are running Birsa Dental College and Hospital. They are planning to obtain more land and residential blocks to start a hostel for this college. Mr.Ramlakhan Singh Yadav has also been given a plot inside the sector. Rita Verma, MP, is also planning to start a medical college here. Sibu Soren is also trying to acquire land through a cooperative. Recently, the officials, in the name of cooperative housing, have got money for 300 plots deposited. Money has been deposited since the last 15 years for shops and now the land is being distributed to the payees at new rates. Land can also be acquired anywhere inside in the name of religion. The present steel minister Mr. Tripathi has already laid the foundation stone for construction of a Jagannath mandir.

Workers are constantly in a rebellious mood and whenever they find an opportunity they rally round under the joint banner of the TUs. Since most of the TUs are participants in the loot and corruption, workers are at times disillusioned. But the silver lining is that whenever these TUs set limits to the struggles, the workers defy them openly. Last year, in July, when the management decided to divert Rs.20000 from PF to pension scheme and increased the price of electricity indiscriminately, workers were on the warpath and the management finally had to relent and print fresh payslips. This amply demonstrates that it is a period of a new wave of struggle.

—D.S. Diwakar