Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Sunday, 3 August 1986

A COUNTRY FIGHTS BACK

Synopsis: Communication For Productivity

Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

To:
Dear Friends                   

 A  COUNTRY  FIGHTS  BACK                   3 Aug. 1986


Bob Hawke  became Prime-Minister  of Australia  in March 1983. Until  1980,  he was  head  of  "Australian  Council of  Trade Unions".  That makes him a strong labour-leader.

Before Bob became  Prime-Minister, Australian economy was in a bad shape.   Unemployment was  close to  10% and inflation  had crossed 11%

But  within  2 years  of Bob  taking  over  the  Govt, economy started growing  by 5% every year,  inflation came  down to 5% and  unemployment dropped  below 8%,  the budget  deficit came down from $ 6 billions to $ 3.5 billion.

But things started getting bad again in 1985.

Unemployment again went upto             7.8%
Inflation climbed back to                      9.2%
Export deficit rose by                           14%

So Bob has  decided that his country must  fight back - and he is telling his countrymen,

"As a consequence, we have, for the time being,  to accept reduced 
standard  of living  and,  permanently  increased standard of-effort".

Although Bob  runs the risk of  becoming unpopular (especially with  his  trade-union friends)  he  has  taken the  following decisions  :                                              

1.  In  place  of  two big  wage  increases  every  year,  the     workers will  get only one wage  increase this year  - and     that too a small 2.3% I
2.  An appeal  to  the Directors  and Senior  Managers  not to     raise their own salaries.
3.  income-tax  to  continue  at   present  level.   Reduction     promised in September to be postponed.
4.  public services (such as  transport, hospitals, education,     etc) will be reduced.
5.  To get  their  benefits, unemployed  persons will  have to     clean streets and parks.
6.  imports will be reduced.

We  don't   know  from  where   Bob  got   these  ideas.   One possibility  is that he got  these from  Prime-Minister Lee of Singapore.
Lee announced a freeze on wages  a few months ago, in his tiny country.  Singapore  is a small  country -  about the  size of Andheri + Vile-Parle  + Santacruz ! Well, may be you can add Goregaon !!

But it's  exports are more  than the exports  of the  whole of India  I  Singapore's economy was  growing by  12% -  15% each year for  the last  15 years  (against 4% -  5% growth  of our economy).  But  1985 turned out  to be a  bad -  very bad-year for Singapore  too.   There was  no growth  in economy  I -  a round 0 (zero) % !

But  Prime  Minister  Lee  is  a  tough  man.   He  has  ruled Singapore with an iron-hand for the  last 25 years.  He begins each  day  by  running  4  kms.   And he  keeps  his  40  lakh countrymen  running   for  survival.   Because,   like  Japan, Singapore  has  no natural  resources  and  therefore it  must import  all raw  materials, process  them and  export finished products.

What Singapore adds  to the imported raw-materials  is its own labour - the  labour of 40 lakh citizens.  And  if this labour becomes expensive, Singapore is doomed !

So Lee has ordered one-year wage-freeze.

Fighting for survival is never sweet - it is always bitter.

And what works for a country also works for a company.

If we  don't implement a  few tough decisions  right away, we too may not be far from a wage-freeze !

What are these decisions ?         

-      Stop all overtime, everywhere.

Do you know how much we spend on overtime every year ?
in Powai          -                          Rs. 48 lakhs
in Canteen      -                          rs. 27. lakhs                         
Rs. 75 lakhs
To this if we add the overtime wages of        

-      Madh/Tengl/Ewac/City Offices,

I am sure the figure could add-up to Rs. 85 lakhs/year.

Let us get rid of this evil completely in 1986-87.

All that we have  to do is to make  sure that we do  not waste those 20-30 minutes  during change  of shift! - and  we save Rs. 85 lakhs per year !!

As simple  as that  !  Unless some  employees want to  make it tough !

H.C. PAREKH

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