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).

5 Sep 1986

To:

Dear Friends                 

The Good Times / The Bad Times

Sometime back, I wrote to you  regarding Prime Minister Bob Hawke of  Australia and  President  Lee of  Singapore  -  how both  are trying to improve the economy  of their respective countries and, in  the process, taking some  unpopular decisions  - (most effective medicines are bitter .! )

Going through  my old newspaper cuttings,  I came across  some of these decisions which  I think, are  equally relevant to  our own country in 1986.

Singapore  enjoyed an  annual growth  rate  of more  than  10% in 1970S  and  early 1980s  -  but  registered an  unprecedented  2% negative growth in 1985.

Opening the parliament on February 21, 1986, President  Lee said,

"Last year's  recession marked the end  of an era of  high growth and relatively  easy progress  for Singapore.  My  government has taken   some  steps   to   reduce  business-costs   and   restore competitiveness.   I urge the—people—to—react—to this adversity cohesively and decisively ".

Finance Minister Dr. Richar Hu announced,

"About 130,000  public servants  in  Singapore will  not be  paid this year's increase in the National Wage  Council Salary in view of the current economic hardship".

(Now compare this  with the announcement  of our Finance Minister Mr. V.P.  Singh on 21st August  1986, that  class B, C  & D govt. employees  will  get new  pay-scales  announced by  the  4th Pay-Commission from October 1986 I  )

And how did the Labour Union of Singapore react ?

Example no. 1

"How can we  ask for a  salary-increase when we  fully understand that the country's economy is in bad shape ?

-  Mr. S. Kandaswamy    General Secretary   

Amalgamated Union of Public Employees (AUPE)

Example no. 2

"About  10,000  employees  at  44 firms  in  the  industrial  and business sectors have agreed to accept yearly  wage-rise of about 4% instead of usual 6.5% ".

-  Union Official   

Singapore Manual & Mercantile Workers' Union

And an  August 20th report .from the Australian city  of Canberra says that Finance  Minister Paul Keating  is cutting U.S. dollars 1.9 billion (Rs. 2337 crores) from Govt. spending on

-      Welfare

-      Health

-      Education

-      Defence and

-      Foreign Aid.

Keating  says  there will  be  ZERO  real  growth  in  government spending  and  Prime Minister  Bob  Hawke  (one time  trade-union leader) adds,

"I am prepared to risk election-defeat to achieve  a budget which is appropriate  to our economic  decline.  This  is our  greatest crisis since World-War-II ".

In size, Thailand is much bigger  than Singapore but much smaller than Australia.   So Thailand is  sandwiched between the economic crisis of the two countries .'

A report from Thailand says,

"  Labour unions in the automobile industry have  agreed to a    reduction in wages so as to avoid the possible  laying off    of workers,  according to  a source  in the  International    Metal Workers Federation.

The  unions, the  source  said, were  very  much concerned about  the worsening  situation  in  the local  automobile industry  as it would affect  the employment  of thousands of  people working in this  and other  related industries. "He—said—several companies—have—already—reduced—workers   ' wages by  about 20-25% with the agreement  from the unions so as to save workers' jobs ".

And in INDIA ?

According  to an  expert's estimate,  the proposals  contained in the  4th Pay  Commission Report  will cost  the Govt.  Rs. 17,000 crores during  1986-1990 .! 

This is  only for the  Central Govt. employees.

But suppose similar pay-scales are granted to

-  the State govt. employees      ?

-  the public-sector employees    ?

-  the private-sector employees   ?

As per  EMF report,  as far  as international  competitiveness ,is concerned,  India is second - from  the bottom  '. Only Mexico is worse than  us II   But at this rate  how long  before we  replace Mexico ?

How  long  before  the wind. of  self-sacrifice  from  Australia, Thailand and Singapore reaches the shores of India ?

H.C. PAREKH