India food strike, fatal riots hobble push to export auto parts
Sunday, 15 November 2009
NEW DELHI, Nov 14 (Bloomberg): Prem Kumar's demand for higher pay and better food at the cafeteria at the auto-parts factory where he works near New Delhi forced General Motors Co and Ford Motor Co to shut three plants on the other side of the world.
The strike Kumar led at Rico Auto Industries Ltd, coming after managers were beaten to death in labor disputes at two other partmakers, may derail an Indian government goal to boost components exports about sevenfold to $25 billion by 2015. One global automaker already is reviewing plans to source as much as $3 billion in parts from India and may instead buy half from China, said Vikas Sehgal, a Chicago-based partner at Booz & Co. He declined to name the company, which is his client.
"People are suddenly looking at India with an eye of suspicion and concern," he said. "When a single company's strike jeopardizes the global value chain, the country suffers in the long run."
The strike Kumar led at Rico Auto Industries Ltd, coming after managers were beaten to death in labor disputes at two other partmakers, may derail an Indian government goal to boost components exports about sevenfold to $25 billion by 2015. One global automaker already is reviewing plans to source as much as $3 billion in parts from India and may instead buy half from China, said Vikas Sehgal, a Chicago-based partner at Booz & Co. He declined to name the company, which is his client.
"People are suddenly looking at India with an eye of suspicion and concern," he said. "When a single company's strike jeopardizes the global value chain, the country suffers in the long run."