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Mahindra bought Ssangyong cheap. With blood on its hands

Survey says India is set to become the world’s third-largest auto-market by 2020. That’s a picture of India shining, with more and more shiny motors rolling out of the factories onto the roads. But there’s a dark underbelly. Hundreds of poor labourers endlessly work without insurance cover or proper wage to keep the nuts and balls rolling.

A recent news report talked about Visheshwar Prasad Singh, the man who met an accident when the plastic moulding machine on which he was working malfunctioned and mangled his right hand. The polymer company for which Singh worked supplied small auto parts to leading car makers, Honda Motor and Yamaha Motor. When the media tried to elicit a statement regarding the lack of safety for its small parts maker, the motor giants acted the standard way: either feigning ignorance or keeping mum.

Visheshwar Singh displays his re-attached right hand that was mangled in a small auto part-making machine
Visheshwar Singh displays his re-attached hand that was mangled in a small auto part-making machine

Auto makers are building an empire on the bloody foundation of the poor. Thankfully for Singh, doctors stitched his hand back to his arm, although his hand is of no use due to paralysis. South Korea had a different story when its smallest auto-making company Ssangyong was dying in debt.

Many Indians became familiar about the company because the sick company was bought at a majority stake by Mahindra & Mahindra on March 2011. Unlike Singh, who at least had a doctor attending to him, many ex-workers from Ssangyong didn’t have that luxury.

There is a page on Facebook known as ‘Ssangyong Dismissed Workers in Mumbai’ that details the downfall of the Korean motor company, and how Mahindra could revive the spirits of those ex-workers who were laid off.

Anand Mahindra, the chairman of Mahindra & Mahindra, promised to revive jobs of dismissed Ssangyong workers

Ssangyong Motor was sold to China’s SAIC Motor in 2004. The step aggravated the financial condition of the Korean car maker that resulted in the mass dismissal of 2,646 workers, around 37% of its workforce in 2009, leading to mass strikes and protests. As many as 28 people from those dismissed workers and their families died either by committing suicide or sickness resulting from lack of proper medical health. Ex-workers attributed this to stress resulting from the mass dismissals. Studies have shown that the highest suicide rates in South Korea are in Pyeongtaek City, where the Ssangyong Motor plant is located.

When Mahindra took over Ssangyong Motor in 2011, hopes of the dismissed workers rose. But nothing much happened till January 2015, when Anand Mahindra, chairman of Mahindra Group, visited Korea for the launch of SUV Tivoli.

At the launch of the SUV car Tivoli in Seoul, 26 shoes were placed outside the venue. Dismissed Ssangyong workers wanted Anand Mahindra to be in their shoes and apprise the condition quite literally

But then something else also happened during the launch that the Indian media failed to pick up. Twenty-six pairs of shoes were placed outside the venue in Seoul where Tivoli was launched. The dismissed workers, who were to meet Mahindra, wanted him to be in the shoes of the deceased victims, quite literally. Along with the shoes, there was a pair of crutches that belonged to a dismissed worker. The Mahindra chairman promised to revive the old relations with workers once Tivoli picked up.

Hopes were slowly turning into despair as Tivoli started raking in profits but nothing much happened throughout 2015. But just at the turn of the year, on December 30, Ssangyong decided to reconcile some of its dismissed workers by rehiring them. Tivoli’s success and eventual revenue finally acted as the healing factor for Ssangyong and its ex-workers.

Hopes were slowly turning into despair as Tivoli started raking in profits but nothing much happened in the rehiring front

This is a success story that India needs to consider as reference. Instead of relying on cheap labour, the motor giants in India should start regularising the workforce. Work-related distress could lead to a domino effect where the boom might just turn to dust.

About the author

Rubi Sahay

Rubi Sahay

I have the knack and enjoy uncovering the hidden layers of the most complex national security concerns. Art and entertainment interest me, too. A Hindu College alumni, I have written for The Hindustan Times and The Financial Express. Every now and then, I love picking up my camera to capture life and its various shades.

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