June 08, 2014
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The Deal and the No-Deal

S P Rajendran

NOKIA INDIA RETIRES WORKERS AT 26 THE Chennai edition of The Times of India reported the following in its March 22, 2014: "I am unfit for any other profession, I don't know what will happen if Nokia shuts operations here," she said. After joining Nokia, a Finland MNC, Poongothai, who is just 26, hailing from the neighbouring temple town of Kanchipuram, ensured her brother completed his graduation and her younger sister is now pursuing third-year engineering education. She had joined Nokia's Sriperumpudur plant on the outskirts of Chennai as an operator in 2006, draws home Rs 13,000.  "I completed my BSc through correspondence. But I do not know any other work other than that of an operator," she said. "My bank balance is zero, and I have no clue on my marriage," she said. "Suddenly, everything looks dark." “Poongothai is not the only one going through this uncertainty. Nokia's Sriperumpudur plant employs more than 8,000 people, most of whom are women. Add to that the staff of component suppliers like Foxconn, Salcomp and others who operate in the SEZ and it comes to 30,000 people. In short, all of them rely on Nokia for their livelihood.” THE FEAR COMES TRUE Within 60 days this became reality. The entire workforce of the Nokia's biggest cellphone handset unit was thrown away in the streets as jobless. CITU state secretary E Muthukumar, who is also a leader of the Nokia India Employees Union, said: "As on date (June 4), nearly 5000 permanent workers' jobs were snatched; all were thrown out with a cruel offer of 'Voluntary Retirement;’ after one week time, the Nokia India will be disappeared; now the bell is alarming on the other companies which were subordinated Nokia's production, for example, Foxconn India Ltd; the management of the Foxconn announced the workers to prepare to give up their jobs,". Now deserted, the roads of Tiruvelankadu, a small village about 50 km from Chennai, used to be buzzing with activity till a couple of months ago. Buses deployed by Nokia regularly picked up and dropped workers here. The men and women, dressed in the stipulated blue uniforms, walked on the streets with pride as the villagers eyed them with envy. Today the roads are empty and the blue dresses have all but gone. "Suddenly, everything looks dark." The words of Poongothai are haunting every worker who has lost the Nokia job. T E Narasimhan and Gireesh Babu reported in Bussiness Standard:  “The layoff has repercussions beyond just the financial. Employees complain that their prospects in the employment market too have been affected. ‘Once we say we are from Nokia, companies try to avoid hiring us,’ says Varun. He and some friends recently went for an interview at a tyre company that is setting up a unit in the state. They say that despite doing well in the interviews and being duly qualified, they were rejected in the first round itself due to their employment history. Ask them why their Nokia background should deprive them of new jobs, and they are clueless. Is it because the workers had organised protests, you ask. But, they respond, legal suits and protests were the only recourse they had to try to save their jobs. ‘Also,’ adds a worker, ‘our job is not that of a skilled labourer. We only assembled mobile phones and that is all we know. Who would give us a job?’ ” Most workers have opted for the ‘voluntary’ retirement scheme (VRS) not only because the future of their job became uncertain, but also because they stood to lose whatever little they could make of a bad situation. SKILLED AND UNSKILLED The qualification required at the time of employment was a minimum of 60 percent marks in the higher secondary school examination. Many young men and women who were pursuing higher studies dropped their plans and joined the factory at Sriperumbudur, according to the Nokia India Employees Union. "If you take away Nokia and the years we have spent here, we have nothing else in our job backgrounds. All of us come from poor families and a majority from rural areas," M Saravana Kumar, president of the union had told. The irony is that between 2006-07 and 2012-13, the Nokia India earned heavy profits touching Rs 1,50,000 crore, simply because of the so called 'unskilled' labour. In this particular period, the company produced 13 million handsets a month at its peak and exported them to about 75 countries. Capitalism always dismantles the lives of the workers by degrading the 'skilled' to 'unskilled.' Karl Marx distinguishes between skilled and unskilled labour in Das Capital (Section 2, Chapter One, Vol 1). It runs as follows: "…..Simple average labour, it is true, varies in character in different countries and at different times, but in a particular society it is given. Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction is constantly being made. A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. The different proportions in which different sorts of labour are reduced to unskilled labour as their standard, are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom....." Exactly this is the happening to the Nokia's workers.   THE DEAL AND THE NO-DEAL The crisis-ridden mobile handset manufacturing unit in Sriperumpudur, one of Nokia's largest across the globe, was on a course to cut staff after the company failed to transfer the factory to Microsoft, a global IT gaint, which has bought the handset and services arms of the Finnish company. The Income Tax Department has frozen the unit until Nokia pays the dues of Rs 21,000 crore that the taxmen claim it fraudulently under-reported in 2006-07. The Tamilnadu government has also served the company with a notice for Rs 2,400 crore in unpaid state taxes. The fate of the factory, which had till recently provided employment to around 8,000 people included over 730 trainees and a permanent workforce of 5,500 with an average age of 25, over 60 percent of them women, was uncertain after the failure to include the factory among the assets being transferred to Microsoft. Nokia decided to introduce VRS last month. The VRS could also be a part of the company's plan to exit India altogether. Since January 2013, the above two sets of tax authorities have raised a demand of about Rs 23,400 crore from Nokia India. One of them attached the Sriperumbudur factory, its prime asset in India. In this situation, in September 2013, Microsoft purchased Nokia's handset business at the global level for 7.2 billion dollars, a deal closed on April 25, 2014, but without this factory. The earlier owner Nokia, which has invested a total of about 500 million dollars in the factory, has no use for it anymore because it has exited handset manufacturing. It did not prefer to pay the taxes even though it profited heavily from this factory, and is not ready to transfer the unit to the Microsoft without legal issues. The new owner Microsoft is, on its part, reluctant to take it because of the legal tangles involved. Trapped in the middle are the factory's poor workers.   GOVERNMENT MUST INTERVENE The strong union of the employees of the factory, affiliated to the CITU, which raised the workers’ voice and organised militant struggles in the Sriperumpudur Special Economic Zone, has been fighting it out to save the jobs of the Nokia workers.  In a letter to the chief minister of Tamilnadu, state CITU president A Soundararajan MLA, who is honorary president of the Nokia India Employees Union (Nokia India Thozhilalargal Sangam), said the voluntary retirement scheme offered by the company should be "withdrawn." "The Nokia plant has been operating at Sriperumbudur near Chennai since 2005 and enjoying several benefits offered by the state government since then. However, without intimating the labourers, the state or central government, the company was sold to Microsoft," said Soundararajan, who is also a sitting MLA of the CPI(M). The company had announced VRS on April 10 and the workers were "by force" asked to accept it and leave the company, he claimed. "If this situation continues, around 20,000 employees working in the Nokia Special Economic Zone and depending on Nokia India factory in Sriperumbudur are in danger of losing jobs. Nokia India has betrayed the employees and the government," he added. The average age of an employee in the factory is 25 years and 10,000 of them are women employees, involved directly and indirectly with the company, he said, adding that the factory and employees may be covered by the Nokia-Microsoft agreement. The union fought it until the last chance to save the jobs. However, the MNC arrogantly walked out of the country with huge profits. Now this is time to save the thousands of workers in other factories of the SEZ. The Communist Party of India (Marxist) recently staged a protest action at Kanchipuram, demanding the intervention of the government in the issue and the threat of layoffs. G Ramakrishnan, state secretary of the CPI(M), addressed the protestors.