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Samsung strike: Can it crash Tamil Nadu’s dream?
Summary
- Workers at Samsung India’s manufacturing facility at Sriperumbudur went on strike on 9 September seeking higher wages and better working conditions.
- They also want their CITU (Centre for Indian Trade Union)-backed union recognized.
Tamil Nadu dominates India’s electronics exports with a 34% share. This hard-won dominance is at stake as Samsung India workers’ strike at its Sriperumbudur unit refuses to die down and risks spreading to other units. Mint takes a closer look at the issues involved:
Why are Samsung workers on strike?
Workers at Samsung India’s manufacturing facility at Sriperumbudur went on strike on 9 September seeking higher wages and better working conditions. The workers, who earn an average of ₹25,000 per month, want ₹36,000 per month over a three-year period. They also want their CITU (Centre for Indian Trade Union)-backed union recognized. The factory, which produces washing machines, refrigerators and TVs, and accounts for 30% of its $2 billion revenue in India, is operating with skeletal staff. The shares of Samsung Electronics fell by over 3% on the South Korean stock exchange on Friday.
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Are work conditions that bad in the sector?
There have been examples of poor working and living conditions in the past. In December 2021, mass food poisoning affected over 250 workers at Taiwanese phone maker Foxconn’s hostel facility in Sriperumbudur. The resultant protest exposed the poor living conditions at the Apple supplier. It forced Apple Inc. to put the facility temporarily on ‘probation’. The development pushed the Tamil Nadu government to build industry-scale housing. Employees from other units have also been complaining. Those at another Apple supplier, Flex, went on a day-long strike in February this year demanding better wages.
What is the backdrop to this workers’ action?
Politically affiliated trade unions have long sought a foothold in the rapidly growing electronics manufacturing sector saying there is no scope for collective bargaining. They have met with little success as these firms do not recognize the unions, which want to make their presence felt. They followed a similar strategy with limited success in Tamil Nadu’s automotive sector.
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Can the strike spread to other units?
CITU officials have made it clear they will expand this protest to Flex and Sanmina, a US electronics manufacturer, demanding better pay and working conditions and recognition of the CITU-affiliated union. This comes when Tamil Nadu has established itself as the go-to destination for electronics manufacturing. The state’s electronics hardware exports have shot up (see chart) and were more than twice those of its nearest competitor, Karnataka. It’s eyeing a 40% share of Indian electronics exports by 2030.
Can the developments spoil TN’s dream?
When the Samsung workers began their protest, Tamil Nadu chief minister M. K. Stalin was in the US seeking investments, including from the electronics sector. Over the years, Tamil Nadu has built up a strong electronics hardware eco-system by wooing investors. Now, if the government supports unions, investors may look at other states. If it supports investors, trade unions may dig their heels in, which could see the labour problems spread. On Monday, 100 workers and union leaders were arrested. It’s a tight-rope walk.
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