Kolar iPhone Plant Ruckus: Wistron Rethinking Expansion Plans After Sabotage By Left-Linked Workers

The quaint town of Kolar and the adjoining Narasapura are hitting global headlines for all the wrong reasons. In 2007, Vemagal in Kolar had experienced the worst ethnic clashes that had spread to Narasapura.

Now, it is again in the news for the riot that has destroyed Karnataka’s first iPhone maker’s dreams of turning into a global player by leveraging cheap labour.

The Taiwanese producer, Wistron, taking advantage of the Modi government’s ‘Make in India’ initiative, had set up this plant employing close to 5,000 skilled and semi-skilled workers from Kolar and nearby districts.

This shocking incident of worker violence with the help of ‘outsiders’ numbering 2,000 and more individuals going on a rampage could not have come at the worst of times when the world was looking towards India as a manufacturing hub, especially after the outbreak of the pandemic, even as many producers of niche goods were winding up their operations in China and heading towards India.

Wistron, however, was a much earlier project which was riding the wave of financial, administrative and labour reforms of the Modi government.

Rethinking Expansion Plans

“The company had just started to turn around and there were big plans in the offing. We did have murmurs from disgruntled labour about salary regularisation, but this major damage has been wreaked on us just as we had plans of hiring 25,000 more workers in both skilled and other categories by the end of 2021. Now, we may have to roll back our expansion plans in India,” said a highly placed source in Wistron.

Software glitch

Labour Commissioner of Kolar division, Akram Pasha, who has examined the salary dispensation, has reported that: “There was only four days' delay in payment of salaries, and we found no evidence of extraordinary delay as labour leaders in Wistron claim. It is also true that the company had doubled its workforce from 5,000 to 10,000 workers, who have been trained to carry out production procedures. The four days' delay was due to a computer glitch on account of migration to a new software platform due to capacity building initiatives of the company.”

Company executive TD Prashanth, in the complaint lodged at the Vemagal police station, has stated that “the rioting workers have destroyed computers, assembly line equipment and damaged building and vehicles and the electric golf buggies used for internal transportation. They even tried to set fire to vehicles parked in the parking lot of the company after damaging and overturning them”.

Staffing agency faux pas?

Seemanth Kumar Singh, Additional Director-General of Police, who is in charge of the overall investigation in addition to Karthik Reddi, Superintendent of Police at Kolar, told Swarajya that “the company had appointed six human resources staffing agencies that have recruited the workers. Intensive investigations are on."

Roopa D Moudgil, the first woman Home secretary of the Government of Karnataka, said, “Wistron had engaged staffing agencies who were supposed to pay the workers. According to initial reports, there have been overrides of the terms on part of the agencies."

Deputy Chief Minister Dr Ashwath Narayan said, “had there been any discrepancies in salary disbursement, they could have been brought to the notice of the labour commissioner or the Deputy Commissioner of Kolar district. The state government has taken serious note of the incident and will take every possible step to enforce law and order with an iron hand. This incident is a serious violation not just of the internal security of the company but also a condemnable act of rioting. The police have been asked to take stringent action against the perpetrators of this incident.”

The 'conspiracy theory' is also being largely discussed across the board. The region is prone to labour unrest, but none so violent and so destructive as this.

Leftist link to violence?

“The political masters of the state have begun accusing the workers of colluding with outside elements and carrying out this attack. This region is no doubt a stronghold of the Left parties, but never was there industrial unrest of this kind — so violent and destructive in nature. We have identified the workers who had approached the labour commissioner, Deputy Commissioner and given a number of appeals to the HR department of the company about the labour contractors’ taking a cut in their salaries,” says Vasudev Reddy, a union activist in Kolar.

The iPhone producer has also initiated an inquiry into the incident and is investigating if Wistron has violated the contractual agreement.

According to the company agreement in hiring contractual partners, third-party staffing agencies will have to pay the salaries to the workers hired by them.

In the meanwhile, Taiwan-headquartered Wistron Corporation has told its principals in Taiwan, and in the police complaint, that it has suffered a material loss of Rs. 437.40 crore and much more in terms of indirect losses due to loss of mandays, production and delivery schedules.

A brief take on the region and its politics

Kolar, Madanapalle, Ranibennur, Hindupur, Gowribidanur, Doddaballapur and adjoining places are highly influenced by the Left ideology, basically, due to the high rate of unemployment and poverty, as these are parched.

Former Congress governments had not taken any policy initiatives to develop these areas, which is why the present MP, Muniswamy, had been bitter about the Congress and the Left parties.

He had alleged in a recent press conference that the region had been experiencing great stress in terms of development and livelihood.

When Wistron set up shop in Narasapura under Modi's Make in India initiative, the Congress and its Left associates had felt the ground below their feet caving in.

The Democratic Youth Federation of India (DYFI) and the Students Federation of India (SFI) — both Left party affiliates — have now jumped on to the bandwagon and have demanded the release of those arrested in the cases of rioting and vandalism inside Wistron factory premises.

DYFI state president Muneer Katipalla has started a campaign calling for "standing together with student leader Srikanth". He said that "in the melee of protecting capitalists, the police and the administration were arresting innocent students".

According to state SFI leader Vasudeva Reddy, out of the 155 arrested, nearly 20 belonged to the SFI and that they would do 'everything' to get them released and exonerated.