Crippling Indigenisation

What needs to be understood is that events like an indefinite strike by HAL employees may not only undermine the Indian aerospace industry, but will impinge on national security as well

Issue: 10 / 2019By Air Marshal B.K. Pandey (Retd)Illustration(s): By Anoop Kamath

Around 20,000 employees of Hindustan Aeronautics Limited (HAL) had gone on an indefinite strike which the management described as “Illegal”. However, following a court order on October 22, 2019, the employees had to terminate the strike and rejoin duty wef October 23, 2019.

Created on October 1, 1964, through the amalgamation of two companies i.e. Hindustan Aircraft Limited and Aeronautics India Limited, today, HAL, a Defence Public Sector Undertaking (DPSU), is one of the largest aerospace companies in Asia and a major player in the Indian aerospace and defence industry. It has infrastructure for manufacturing in the aerospace segment in nine locations and has three Research and Development (R&D) centres across the country. With more than 32,000 employees on its rolls at present, in the financial year 2018-19, this state-owned DPSU recorded a turnover of 19,400 crore. With its vast infrastructure, experience in manufacturing aircraft and skilled manpower, HAL undoubtedly, has the potential to play a major role in the nation’s drive at indigenisation in the aerospace segment of the defence industry.

The root cause of the strike appears to be the failure of efforts by the trade unions and the management to resolve the deadlock over the issue of revision of wages. Surprisingly, this stalemate has been reached despite 11 rounds of dialogue. The unions have demanded a wage revision to be on a par with that given to the executives who were privileged to receive a hike in salary by of 35 per cent and a 110 to 140 per cent enhancement in perks in the last pay revision. The wage revision which takes place every five years has been due for the employees since January 1, 2017, as the previous two revisions were in the years 2012 and 2007. In this round of wage revision, the offer by the management was pitched at a significantly lower figure that was not acceptable to the trade unions. Claims by the management that the finances of the company were not in a healthy state, were not accepted by the representatives of the trade unions engaged in the negotiations for wage revision. Their argument was based on the fact that the company was rather liberal when it came to revision of salaries and perks in respect of the executives of the company, but the management was quite prepared to compromise the interests of the employees. The company, on the other hand, found no justification and rationale in the demand of the trade unions to extend the benefits to be on a par with or even higher than those sanctioned for the executives. The management claimed that the employees were offered the best package revision and termed the strike as illegal, unjustified and totally unwarranted. Even the government officials in the Department of Labour had advised the leaders of the trade unions to find an amicable solution to the dispute and not to resort to agitation in any form or go on strike. Unfortunately, this advice was ignored and the trade union leaders displayed scant regard for national security interests as also for the reputation and well being of the organisation they serve in especially as it has been classified as Defence Establishment under Public Utility Service.

The impact of a strike by the employees of HAL on the Indian aerospace industry will depend largely on how long the strike lasts. What was particularly disconcerting in this case was that the strike was classified as “indefinite” and hence one did not know or could predict as to how long the Indian aerospace industry would remain paralysed. If the strike had continued for a long duration, it could have had serious implications for the Indian Armed Forces that depend on the organisation for aviation hardware as well as its maintenance and the supply of spares to keep military aviation assets operational. It would have also been a setback for not only the ongoing projects such as the light combat aircraft (LCA) Tejas Mk I as well as the LCA Mk IA, the light combat helicopter (LCH) and the HTT-40 basic trainer aircraft; but also for new projects such as the development of the LCA Mk II, the Intermediate Jet Trainer, co-production of the Ka-226 Kamov light helicopters and development of the Advanced Medium Combat Aircraft (AMCA), a fifth generation combat platform, the requirement for which will be critical for the Indian Air Force (IAF) in the years to come.

Quite ironically, a day after the strike commenced, Chief of the Army Staff, General Bipin Rawat, while speaking at the 41st Directors Conference at the Defence Research and Development Organisation, said that that the organisation has made strides in ensuring that requirement of the country’s defence services are met through home-grown solutions, adding that the next war will be fought and won through indigenised weapons systems and equipment. What needs to be understood is that an indefinite strike by HAL employees will not only undermine the Indian aerospace industry, but will impinge on national security as well.