New Violence Underscores India's Troubled Labor-Management Relationships

As India Knowledge at Wharton reported in a July article, titled Labor Pains: Is Industrial Unrest Growing or Slowing?, the emerging economy's economic slowdown and outdated labor laws have led to disturbing incidents of violence against managers by workers. According to a report in today's Wall Street Journal, the problem continues — and raises concerns that "a wall of industrial unrest" threatens the pace of India's economic growth.

One of the incidents cited by the India Knowledge at Wharton article was the September 2008 murder of Lalit Kishore Chaudhary, CEO of Graziano Transmissioni India, the Indian unit of an Italian auto component maker. He was clubbed to death by a group of 200 factory workers when he approached them to discuss issues that triggered a protest they had staged at the factory gates. A year later, at another maker of auto components, Pricol Ltd., workers burst into the office of Roy George, the company's 46-year-old human-resources boss. Citing witness reports, The Journal says workers who were angry over a wage freeze used iron rods to beat the manager to death. Police arrested 50 union members in connection with his death, their lawyer told the newspaper, but no charges have been filed.

The Journal says "the unrest serves as a reminder that India has far to go before it stands alongside the world's other economic powerhouses. With its widening middle class and growing base of rural consumers, India has averaged more than 8% growth for the last half-decade. It is seen as a country that can help lead a global economic recovery."