Vantage point

Friday, May 12, 2006

Tata Motors in Hartal-land??

One can't help but wonder which infinite-optimism-inducing drug is responsible for the almost-finalised decision of Tata Motors to set up a car plant in West Bengal. Yes, Buddha-Bhatta has worked hard to create a business-friendly image for the state and single-handedly injected a sense of optimism into the proceedings. But that optimism is driven by the IT industry which has set up offices in Kolkatta because of cheaper land, and most importantly, and this can not be emphasised enough - no unionisation. In a cruelly funny twist of irony, Buddha-Bhatta put IT under "essential services" to ward off fears of the unionisation which was responsible for turning West Bengal into industrial ruins over the last half century.

Now Tata Motors is planning to set up a plant there, and not just any plant. The 1-lakh-rupee-car plant, which will obviously have to maintain high volumes of output. Considering the union problems Tata Motors(formerly Telco) has had at their plants in comparitively un-unionised places like Lucknow and Pune, you would expect pink elephants to be ice skating over a frozen hell before the company would set up a plant in the mother ship of trade-unionism. Especially since the 1-lakh-car project is widely considered as over-ambitious, and will be facing challenges on every front possible. Why would the Tatas add another potential battle-front by risking a protracted strike?

While Ravi Kant, the Tata Motors MD, was cautious and merely mentioned West Bengal as one of the shortlisted states, Buddha-Bhatta has enthusiastically gone ahead and announced to the world that the decision has been made. The Hindu which obviously forgets journalistic propriety and caution when it comes to cheering Commies, has the headline "Tata Motors selects West Bengal for car project" even though all other news sources noting Kant's statement have used terms like "may set up" "to consider", "likely to". Buddha-Bhatta is obviously pressurising the Tatas and thinks he can force their hand by announcing the decision.

Ratan Tata should read this as an ominous sign of things to come. If even the announcement of the decision is being appropriated by the Commies themselves, he can imagine what kind of control they will wield on the actual plant. The plant will of course have a labour union, since Tata Motors comes under the manufacturing sector. When the Tatas faced labour problems in Pune in the 80s, the state government led by Sharad Pawar was proactively helping the Tatas and doing its best to defuse the situation. Ratan Tata in fact shot into limelight by his deft handling of that petulant strike led by the commie-supported union-dada Rajan Nair and it is widely acknowledged that the event helped him upstage Darbari Seth and Sumant Moolgaonkar to be chosen as JRD's successor.

Having such rich experiences with labour troubles and the knowledge of what a defining role sympathetic state governments can play in the same, I find it hard to believe that the Tatas will set up such a crucial plant in West Bengal.

Let's see how this story unfolds. If they do announce the plant in WB, it will be interesting to see how the Tata Motors stock moves.