One year after closure of the Nokia factory in Sriperumbudur, it is not clear that the government has learned any lessons from the failure of that celebrated manufacturing venture
‘In the land of hope, there’s never any winter’. It was a nice, poetic opening line to an old Business Today story from 2008 that I came across the other day.
Titled ‘Dream Factories’, the story referred to two young women, 19-year-old K Narmada from Katpadi town and 22-year-old Mohanavalli from Iyengarkulam village near Kancheepuram in Tamil Nadu. Daughters of a painter and a weaver respectively, these young women had left their villages to ‘pursue their dreams’. Like them, according to the article, there were thousands of young women in Sriperumbudur who had become ‘dream weavers for their families…thanks to their work’. And giving ‘wings’ to the ‘aspirations’ of the young women ‘…is a company that specialises in connecting people, Nokia’. A scan of news articles between 2008-2010 reveals similar stories of how the lives of rural young women were getting transformed by the electronics factories in the region. However, a more recent piece, last year, in the same magazine on the subject called it ‘Death of a dream’.
In April 2014, Nokia offered a Voluntary Retirement Scheme to the young workers to quit their jobs and on November 1, exactly a year ago, stopped production in one of its largest mobile assembling plants in the world. Meanwhile, Nokia’s supplier companies – Foxconn, Lite-On Mobile, Build Your Dream (BYD) – closed their factories one after the other in the following months. Roughly over 8000 workers lost their jobs in the final phase of the closures of these factories. Although, if one counts the numbers of workers losing jobs from the months preceding the closure, its much higher.
For instance, Nokia started shedding its contract workers – what they called ‘external temporary labour’ – from November 2013 onwards. In less than two months, between December and January, over 1500 ‘temps’ were forced to quit the company, needless to say without any compensation, since in the labour ‘caste’ hierarchy, the ‘temps’ occupy the bottom rung. Next in line were the ‘trainee’ workers, an ambiguous category, not protected under the Contract Labour Act (1970) or the Apprentices Act (1961) but guided by the Industrial Employment (Standing Orders) Act 1946.
Both workers and trade unionists maintain that under the guise of the Act, management draws up its own ‘flexi’ labour policies to recruit trainees. For instance ‘operators’ in Nokia were first recruited as ‘trainees’ for 36 months, doing the same work as the permanent employees but drawing half the wages and no guarantee of secure employment after three years of ‘training’. When the factory started in January 2006, the training period was for 15 months, but after 2009 this policy was changed to 36 months. The trainees were not allowed to join the employees’ union. Perhaps it was not a coincidence, as this was the time when Nokia shop floor workers started unionising.
In 2005, when Nokia planned to open its phone assembling plant Sriperumbudur with a capacity of 6.5 lakhs handsets a day, it was interested in two things – the burgeoning Indian consumer market and subsidised resources. Nokia became synonymous with mobile phones, with the brand dominating 80% of the Indian market at one time.
A scrutiny of the Memorandum of Understanding signed between the Tamil Nadu government and Nokia India Pvt. Ltd on April 6, 2005 revealed the ‘support’ offered by the state government. This was in addition to the already ‘liberal’ fiscal incentives given in the SEZ Act that included land at a concessional rate and reimbursement of Value Added Tax on phones sold in the country. One study concluded that it cost the Tamil Nadu government Rs 645.4 crore to ‘attract’ Nokia’s investment into the state.
One of Nokia’s supposed ‘social contributions’ was its preference for hiring young women. This was showcased as a major ‘achievement’ that the company and senior government bureaucrats, politicians and the media regularly projected. But it wasn’t for charity that Nokia recruited women workers. The electronics industry worldwide is known to hire young women in their assembly lines. Geographer Melissa Wright, conducting research amongst electronics worker in the US-Mexico border area and in southern China writes that ‘with virtually every multinational firm in the electronics industry, managers hire women to work on the assembly line on the assumption that they are the best electronic assembler because of their famous “dexterity”, “docility”, “patience”, “attentiveness”, and “cheapness”.’ This, according to her, is part of a discursive ‘myth’ that keeps circulating, seeking to create an assembly line worker, young, ‘disposable’, preferably female, whose ‘docility’ and ‘finger dexterity’ makes her an ‘ideal’ candidate for the work.
Activists and researchers have long exposed the myth of the ‘suitability’ of women to perform certain tedious, repetitive and monotonous work purportedly due to their ‘natural’ attributes of manual dexterity, ‘nimble fingers’, inclination to ‘accept tough work discipline’ etc. In a study done amongst the women workers in the electronics factories in Delhi in 1997, sociologist Amrita Chhachhi found the bulk of the women workers to be ‘young, just out of school, (doing) their first job and first venture outside the security of home… Managers called them “fresh and green”. Like vegetables, their youth would be consumed in producing consumer items few of them could afford to buy.’ Therefore, it was the logic of production that made Nokia hire young women and not some act of benevolence as it was made out to be. A cosy accommodation of private capital and patriarchy worked together to accumulate profit under the guise of women’s emancipation.
Behind the smokescreen
Workers had been protesting against low wages and insecure jobs in the Nokia factory right from the beginning. The sit down strikes on the shop floor started soon after the factory became operational in January 2006. As one of the workers once said, ‘it was a continuous struggle’. But this was not what the media reported. Much was written about Nokia’s gleaming multi-cuisine canteen, transportation (home drops for women at night), crèche etc. In fact, both night transport and crèche facilities for working mothers are mandated under labour laws which Nokia was obligated to implement as per legislation.
One of the young workers reminiscing about his desire to join Nokia said, ‘Newspapers, television talked about its grandness. Nokia buses were going here and there in every small lane. When I saw this, even I wished, won’t I be in that bus someday? My life could also be good. In this desire, when I got the job in Nokia, I discontinued my studies and everything and went to work in Nokia. We were obsessed with Nokia, Nokia…we left the thought of searching for other jobs. I came to this work because we should at least become middle class in life.’
For all it’s ‘charitable’ acts (what it called ‘employees cost’), Nokia only had to spend 1.54% of its total turnover (Rs 22,842 crores) for the year 2012-13, whereas the ‘accumulated surplus’ for the company (Nokia India Pvt Ltd), as per its balance sheet (dated March 31, 2013), was Rs 6602 crores. Therefore, for Nokia to offer a good canteen or transportation to the workers was not something that burnt a hole in their pockets, but something they could ‘afford’ to do to create a sense of benevolence amongst the workers for the company and to also earn unquestionable accolades from the state and media.
Not that the workers couldn’t penetrate through the smokescreen. As one young mother told me, ‘It’s fine that they are giving us all of these things. However, what we need is an increment, a better salary. We are working for that. So far, we have got all our increments (only) after fighting…’ While the company was churning out 15 million handsets a month, with workers labouring eight hours a day in three shifts, the wages remained low for years. When Nokia set up its plant in 2005, it paid its employees only Rs 4,500 per month. Even the much ‘celebrated’ wage settlement in 2013 wasn’t adequate, although it was projected otherwise. A young woman complaining of low wages (after the settlement) said, ‘The pay is so low here, they make us work so much and give us such low salaries. I have experience and an MBA degree and I get only 18,000 per month.’ But in a context where wages are generally low, conditions of employment are insecure and female workforce participation in the formal manufacturing sector is small, the media presented Nokia’s operations as “benign”.
However, it didn’t take long for it all to change and a series of events from the beginning of January 2013 led to the final closure of the factory in November 2014.
The downslide started ostensibly with an income tax raid on the factory and charges of tax evasion against Nokia both by the Central and state governments. This was followed by the global sale of Nokia’s Devices Division to the US-based Microsoft Corp. What still remains a mystery is how Nokia, once the most touted ‘successful’ SEZ in the country, became ‘evil’ in the eye of the state? What arrangements changed between the state and the corporation for this quick turn of events? Or was this all a myth that was circulated to make it easy for Nokia to ‘exit’ to greener pastures? Perhaps there is more to it than meets the eye.
The fact that Nokia (now Microsoft) was already moving its major operations to Hanoi from China and India, where the Vietnamese government was offering subsidised resources and cheap labour (wages of about Rs 8000 per month) was something that was not much written about. On their part, both the Central and state governments maintained a stealthy silence as the company locked up its factory and moved out, leaving thousands of workers jobless. How did the state allow that? And before it moved, Nokia ensured through a new MOU signed in 2012 followed by a state government order in 2013 that it could continue to sell its phones in India by bifurcating the company into two – marketing and production (factory). While the factory remains mired in a tax dispute, the sales division, now a separate company (Nokia India Sales Pvt Ltd) and bought over by Microsoft, continues to do business in India.
Ex-Nokia workers and workers from the supplier companies continue to search for jobs, which are not easy to come by. Many remain unemployed or self-employed, and some continue to fight it out in the labour courts demanding re-employment as they refuse to accept the severance package forced upon them by the companies. The fact that labour remains so dispensable in the manufacturing sector poses a challenge to the government’s ‘Make in India’ mission.
Prime Minister Narendra Modi recently met Terry Gou, founder of Foxconn, a company which couldn’t keep 1300 workers employed in its factory in Sriperumbudur, yet promises to give employment to 50,000 workers with an investment plan of US $5 billion in India. The company already has a poor track record of not just labour standards but failed investment promises in Brazil, Vietnam and Indonesia. Recently Foxconn has offered to buy the Nokia factory, on condition that it is given the same subsidised land price – of Rs. 4 lakhs per acre – that Nokia was given in 2005. The current market price for land in the same area stands at around Rs. 2 crore an acre. Foxconn has also said that it will not hire any of the ex-workers.
Madhumita Dutta is a member of the Vettiver Collective based in Chennai and a PhD candidate in the University of Durham, UK