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).
|
28 Jan 1987
To:
Dear Friends
(Part VII)
Perhaps
you know that the biggest share-holders (therefore, owners ?) of L&T are the
Financial Institutions like,
-
UTI (Unit Trust of India)
- LIC (Life Insurance Corporation)
- etc., etc.
Between them, I
believe, they hold more than
35% of L&T shares and they nominate members on our Board of Directors. The Board takes policy-decisions and guides
the destiny of the company.
Now, if bks (Bharatiya Kamgar Sena) were to
be the largest share-holder of L&T,
what kind of policy-decisions would they take with respect to L&T's
- Future operations
?
- Current Operations ?
I do not
know !
I will not
even guess !!
But I do
know about a large trade-union federation (like our INTUC
- AITUC,
etc.) of Israel and the kind of decision it is taking in a company it OWNS. !!
Membership : 12
lakhs workers
"owned" by this Union
KOOR SIZE :
KOOR is the
largest manufacturing industry
in the Middle-East, with 250
subsidiaries and offices in 40 countires.
1985 Profit
: Rs. 22.75
Crores
KOOR
PRODUCTS :
Ammunition/Mortars
Electronic Products
Antibiotic Drugs
Mayonnaise (like butter)
Pilotless Airplanes !
· 20% higher than other Israel companies
· One month bonus
KOOR WELFARE
1. Subsidised meal
2. Discount consumer co-operative stores
3. Loans (to members) for, child care college tuition
KOOR ACTIONS
:
When KOOR's
profitability started going down,
what did the owner-Union
do ?
They did
the same thing
that capitalist-management do anywhere else in the World !
They hired
a professional (M.B.A. -
Business graduate) Manager - Mr. MEIR AMIT to set things
right ! AMIT
took following actions, fully supported
by the Top Management -sorry.
Top Union !
1. Closed money-losing motor-factory.
2. Cement Factory
(a)—Reduced manpower from 900 to 600 (33% less)
3. Added new products in -
(a) electronics (b)
metals (c) chemicals
5. Located
new-plants in unpopulated parts
of Israel
6. What
happened at the Subsidiary companies of KOOR ?
Name of
Subsidiary : Company
|
TAD IRAN
|
|
Product :
|
Munition
(Bullets/ Bombs)
|
Electronic
Products
|
Sale :
|
1985: Rs. 742.3 crores
|
|
Growth
Rate :
|
||
Lay-off 20 % 2000 workers
|
Lay-off 8% of 12600 workers
|
1. President AMIT said,
"I am not
a Welfare department
of HISTADRUT" (the Labour Union who
is the
owner of
KOOR).
2. When Union-leaders objected to manpower reduction, AMIT replied,
"I
am a
good socialist, and I am in
favour of even (uniform) spread
of wealth. But
first you
have to have something to spread
!
To spread "nothing" evenly
(uniformly)
is no-big deal".
"We are in
a business that must make
profit. First comes profit, then
welfare".
4. Not to be left out.
Chairman bluementhal adds,
"For us Profit-making is the measuring-rod that tells us whether we are on the right
track".
market. Jobs
should take precedence over earnings".
And because
Union is the sole owner of KOOR, you
would think that they will
announce a big dividend, for the shareholders (that is, for themselves).
Afterall, who is
to stop them
?
No way !
KOOR
management's (I mean Union's) policy is -
NO DIVIDENDS - NEVER !
Typical case
of
"When
a lover gets married and
becomes a husband, he ceases to
be a lover '."
Moral of the
story (for the Government of India ?)
Do not be in a hurry
to put a worker on the Board of Directors.
Let "Worker-participation-in-Management"
begin where it should - on the shop-floor.
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