Samsung Electronics workers’ protest enters fourth week, threatens to dent India’s ‘manufacturing hub’ dream

India’s push to position itself as an alternate manufacturing hub besides China seems to have run into rough weather as more than 1,000 workers of Samsung Electronics are on strike at the South Korean firm’s home appliances plant in Tamil Nadu. 

The workers are protesting since September 9 over hike in wages, union recognition and working time of 8 hours at the plant, which accounts for a fifth of Samsung’s 2022-23 India annual revenue of $12 billion. 

Police on October 3 had detained 912 workers and union members for organising a street protest as the strike entered its fourth week. They detained workers were released later, Reuters reported.

A case has been registered against the workers under eight sections, ANI reported. 

CITU state President, Soundarrajan, said that the government has not taken any measures to support the workers, despite promising to support them before coming to power. 

“Before coming to power, they had promised that they will solve the issue faced by workers and would have great support but the government didn’t support in it and still we are with their (DMK) Alliance we won’t encourage this and we condemn it,” he added. 

Samsung in a statement said that the average monthly salary of full-time manufacturing workers at the plant is nearly double that of similar workers in the region, and that it was open to discussions with workers about resolving the matter. At Samsung India, the welfare of our workers is our top priority, it said. 

The plant in Chennai city, one of Samsung’s two factories in India, employs nearly 2,000 workers. Another Samsung plant in Uttar Pradesh, which manufactures smartphones has had no unrest. 

Samsung has warned the striking workers about the risk of losing their jobs and has taken CITU members to court, saying the strike is illegal. The employees however say they will continue to protest until their demands are met, Reuters reported.

Workers’ demands 

The striking workers demand that Samsung recognise their newly-formed labour union - the Samsung India Labour Welfare Union (SILWU). They say that only a union can help them negotiate better wages and working hours with the management. 

Samsung workers earn Rs 25,000 ($300) on average each month and are demanding a raise of Rs 36,000 a month reached within three years, CITU said.

The protest has gained momentum, with CITU-affiliated trade unions joining in solidarity. Soundararajan expressed the CITU's frustration over delays in union recognition. 

Tensions escalated on September 16 when police reportedly detained approximately 120 employees, including a CITU district secretary. Soundararajan criticized the police action and subsequent warnings against protests in Chennai. 

Soundararajan added that CITU-affiliated unions may consider expanding protests across the state and called for support from other political parties and organisations. 

Tamil Nadu’s investment push 

The ongoing unrest threatens to dent Tamil Nadu’s push to develop an image of a preferred investment destination for companies among the states.  

Recently, Ford Motor announced its India re-entry plans three years after announcing its exit. In September, the automaker announced its plans to restart the Chennai plant, which it said would be repurposed to focus on manufacturing for export to global markets. This is part of the company’s ambitious Ford+ growth plan.  

Ford is yet to announce the cars that it plans to make at the facility. Before its exit, the US-based vehicle manufacturer built cars and engines at the Chennai plant.  

On September 28, Tata Motors held the groundbreaking ceremony of its new, world-class production facility to manufacture cars and SUVs, at Panapakkam in Ranipet district, Tamil Nadu. This manufacturing facility will produce next-gen vehicles for Tata Motors and JLR. Tata Motors intends to invest Rs 9,000 crore in this greenfield manufacturing facility, which has been designed for an annual production capacity of over 250,000 vehicles. 

Meanwhile, production at Tata Electronics factory in Hosur has been suspended after a fire broke out at the factory, reported Reuters. Authorities are set to launch a forensic investigation to find out the cause behind the blaze. The Tamil Nadu plant produces essential back panels and other components for iPhones.