India: capitalism in the raw

The murder of an Indian chief exec by a mob of sacked workers harbours a stark lesson in lay offs.

Last Updated: 06 Nov 2012

Lalit Kishore Choudhary, head of the Indian operations of Graziano Transmissioni, a manufacturer of car parts that has its headquarters in Italy, died of severe head wounds after being attacked on Monday by a gang of staff he'd laid off from its plant in Delhi. Which is surely taking the concept of employee action too far.

It is of course a tragic and extreme case, but one that provides a grim demonstration of the high emotional stakes that surround the issue of redundancies - something many bosses may be forced to consider right now.

Indeed, it all started on familiar enough territory - a long-running dispute between management and the workers, who were demanding better pay and permanent contracts. And there'd even been signs of conciliation. Choudhary had apparently called a meeting to suggest a possible reinstatement deal for more than 100 former employees who had been dismissed after an earlier outbreak of violence at the plant.

While the meeting was attended by only a few people, 150 ex-employees waiting outside heard a shout for help and rushed in. Violence followed, with Choudhary being attacked and other executives apparently locking themselves in their office from inside and praying.

The actions of the workers here are of course inexcusable -no-one deserves to get their head bashed in for running a company, even if they are delivering bad news. But it does provide a timely warning that if not handled correctly lay offs can come back to haunt you. Just look at the scenes earlier this year in France, where factory boss Mike Bacon was held hostage by people he'd recently put out of work.

What's worse is that it isn't the only violent incident to blight corporate India. Thousands of violent protesters recently forced Tata, owner of Land Rover and Jaguar, to halt work on a plant being built to produce the Nano. The move could result in £200m in investment costs being written off. Other companies, including Vedanta, the London-listed mining company, have encountered similar problems in the country.

India is reliant on inward investment for its continued economic development. And such scenes are unlikely to add to the queue of companies seeking to set up there.

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