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).
|
12 Feb 1986
To:
Dear
Friends
PRODUCTIVITY AND UNEMPLOYMENT
Does increasing
productivity increase
unemployment? Let's look at
the fundamental definition
of Productivity.
Productivity
is equal to Output
manpower
Let us take
an example of our famous MK-1 starter.
Today, we
take 133.8 manhours for final assembly
of the same number of MK-1 starters.
1979
productivity is equal to 1,000 starters = 5.98
167 manhours
1985
productivity is equal to 1,000 starters = 7.49
133.8 manhours
That means
with one manhour, we are
able to assemble 7.47 starters in
1985 as compared with 5.98 in 1979.
Therefore,
rise in Productivity = 24.8%
During
the same
period, (1979-85) the wages of the Assembly
Worker (working in MK1-Final
Assembly) went up by
282%!!!
But CPI Index went up by only 179% in the same period.
So you have
seen that Productivity - increase,
means "doing same with less manhours".
That means,
we require less men than before (to produce the same quantity).
That means,
"surplus" people.
That means,
unemployment!
Seems
so simple! Some people
(the surplus-ones) must lose
their job !!
By now, you
are itching to ask!
"If
that is so, why the hell must we increase productivity?
-
If that
means throwing some people on the roads?"
The answer
is equally simple.
If we do
not throw some of our
people on the road, the competitors will throw all of us on the
road !!
If our
productivity does not increase (even at
the cost of a few jobs), our cost
will keep going up and we cannot
sell our products in the market.
- the Managers
-
the Engineers
-
the
Accountants
-
the
Stenographers
-
the
Store-keepers
-
the
Workmen
-
the whole
lot !!
And this is
what seems to be happening in Europe
& elsewhere right now. To give you an
example, please see the chart below
showing number of
employees shed by
8 reputed companies.
Name of Company
|
Employees
shed or proposed to be shed (Nos.)
|
|
1.
|
24,000
|
|
2.
|
Ford Motor
Co.
|
10,000
|
3.
|
Union
Carbide Corpn.
|
4,000
|
4.
|
2,000
|
|
5.
|
Motorola Semi-Convertor Group
|
9,200
|
6.
|
11,200
|
|
7.
|
Kodak
|
9% of its
workforce
|
8.
|
Warner-Lamber Co.
|
21,000
|
Compared to America,
and Japan, the European productivity continues to be
low. Hardly a day
passes without some European
factory closing down (because they cannot
sell their expensive products), throwing hundreds of employees on the road.
This is especially
true of the European Automobile
Industry. This is why I have made some
notes from a recent article in time magazine, which I am
reproducing below. Now, I would like you to answer the question,
"How come,
Europe, whose productivity
has remained static/stagnant
over the last 8/10 years, has a rising
level of unemployment, whereas America, which has increased
its productivity has created 18,00,000 new jobs during the same period?"
Did you
say, "
... increased productivity means
losing jobs?"
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