Dec 19, 2012

The Factory

As our cars took the bend off the highway, the road crumbled into a mix of mud, stones, patches of tar and a whitish soil. The colour of the soil hinted that we were close to the factory and no sooner had we be been shaken ten minutes down that road, we saw it, surrounded by small hills of white clay. The white looked out of place as it was in turn surrounded by the red hard soil that is characteristic of these parts. The outlines of the nearest village could be seen some way off. We - two of us, a local government official and the plant manager - were sweating heavily. I looked down at my watch, it was nine but the sun seemed to have perched high in the sky long back. This was Birbhum after all. In June, the mercury usually hovers above 40 degrees centigrade, cattle have been known to fall down.

We reach the factory gates, they were already open. The manager said that lunch was ready and that we should eat first before the meeting. The workers' mess had been shut down long back as most of the workers were local residents and preferred going back home to eat. There were no time-sheets to think about in any case.  We walk along the path circling around the inner edge of the boundary wall and through a short flight of stairs enter the manager's quarters. The walls had turned grey from the paint chipping off and the heat. There was a single light bulb in the living room and a table fan. The flat was not cool but the sweat on my neck cools in the shade. We eat a delicious, vegetarian lunch that the manager had cooked himself before meeting us off the highway.

Eating over, we step out in the heat to look at the factory. The buildings, the work-sheds, the godown look dilapidated. We go to the shop-floor and check the inventory of the machines and equipment that we had brought with us. The important machines are three grinders. Two look almost new. I look at the manager looking at me. "We shut that one down three years back. Then a year afterward, we shut down the other. We never had to produce that much. Besides, running all the machines mess up our electricity bills." I nodded and made a note.

The communists came to power in 1977, since then they had never lost an election in the state. Their approach to governing was based on the idea that the state could do anything. In rural areas, take away land from landlords and big farmers and give it to the landless. In cities and towns, strong arm businesses into taking in everyone recommended by the unions into their payrolls. Coopt resistance from the educated through government jobs. Salaries, pensions and interest payments on loans soon ballooned to over 100% of revenues. But land reform earned them the rural vote in perpetuity. A 'socialist' attitude to tax collection coupled with welfare programmes for every possible category of farmers and workers, in other words the party's members and voters, soon broke the bank.  These payments soon climbed over 100% of the revenue that the government raised for operational expenditure. Once it became clear that even salaries of public sector workers, their card carrying members, could not be paid, the party realized they had to break the news to the people that the people's government was broke.

As the government (or the party, both in communist tradition had fused into one) announced reforms, an obvious starting point were the myriad state owned enterprises run by subsidies. A recent report from the government's accountant general had found that of the 11 statutory corporations and 69 public sector companies in the state (with a total investment of 1.5 billion pounds of public money), not a single one had paid a dividend to the state government for most years of their existence. Helped by their abysmal indicators on poverty and human development, the government found international development assistance readily. International development agencies stepped in with soft loans and grants on condition that the worst of the worst, heavily 'loss-making' state eneterprises, had to be done away with or sold to the private sector to justify transfer of foreign taxpayer money.

This factory had been born out of a grant earmarked by the region's member of parliament. In this particular case, the local political heavyweight in time became the speaker of the house of the country's parliament so the factory stayed even as it bled over the years. It made china clay, which was used in the footwear industry to give rubber flip-flops their pliability. At first things were good. Propped up by state loans, the party's influence ensured steady procurement by the footwear industry. Then, the management made a fatal error. They did not see EVA, a synthetic substitute for china clay, flooding the market. Cheaper and with superior chemical characteristics, most footwear manufacturers quickly switched. Since then, some arm twisting from party heavyweights had ensured that some local businesses still bought their supplies from them but the damage had been done.

Our job, as consultants to the government, was to go through the company's finances, check its operations and figure out whether it should be slotted into one of three categories. Category I meant there was no hope at all and the company had to be liquidated. Our report had already categorised the company as a I. But to make it look as if it was a product of mutual agreement, the consultants had to talk to the factory union and present to them the analysis, but not the results. Obviously the government did not want to send its bureaucrats to give the good news to their own unions. And the firm's partners were not too keen to be caught in a room with union representatives. So it was us, both lower down the food chain which reduced liabilities for all concerned. Our job was not to break the bad news but to officially make it look like as if we were here to listen to them about what should be done.

So we had driven down from Calcutta to meet the 'management' - a council of foremen, plant managers and the local union boss. After we had done our rounds of equipment and seen the unsold piles of processed china clay in the warehouse, we filed into what used to be the director's office. (The position had been vacant for a number of years.) We walked into a spare, square room with a green topped table and a telephone on it at one corner and lots of wooden chairs all around it. My colleague, who I shall call B, talked in town-hall style about the company's finances and the increasing losses. Operating losses had jumped to 80% of net sales. Capacity utilization had fallen. Revenues had steadily decreased every year. Government subsidies had increased every year. And so on.

The union boss who was also the local party leader, listened to us patiently. He looked like a retired school teacher with his umbrella and white dhoti. Around us, were the rest of the committee but it was clear who was in charge. Through the windows of the room stared the contract workers, sweating in the heat, their dark faces and white eyes turned towards us, through the bars at the window, as if we were in a cell.

B sipped from a glass of water, and asked the room if they had any questions. There was a shuffling of feet and then the old man said in a clipped voice," We note the conclusions of your report but reject the recommendations."

Then he took out some pages with neat handwriting in two different inks. "These are our recommendations on how to revive this company. A copy has been sent to Writer's Building." A and I looked at each other and then glanced through the list.

I was the first one to look up. "Two of your machines have been shut down. And product is lying in the warehouse unsold. How would you do things differently when you say the 'factory assets should undergo reutilization'?"

"Fish feed."


"The local fish farms need feed. Right now they get it from trucks coming in from the city. Our grinders can produce fish feed and sell it to them."

"But these are machines that were installed to produce china clay."

"They are just machines. I haven't seen anything which says they can be used for only one thing."

I make a note. I see B scribbling notes too.

The old man continued. "We have lots of land and two ponds within the premises. The land can be used for livestock and the ponds can yield fish. There should be chicken farms as well. Poultry will do well in this region." We make more notes.

B chipped in. "You have an enterprise that has been making heavy losses for a number of years now sir. We are here to listen to all of you and take note of any suggestions you may have."

"I have just given you my suggestions." It was obvious no one else in the room was going to give us any of their own. 

"Why do you think the company has gone into losses?" I could see that the old man had irritated B as he spat out this question. I glanced at the windows on either side of the room. A small boy had climbed on the shoulders of one of the men and was staring at us.

"You should ask the management that. They have been mishandling things for a long time now. The workers have tried a number of times to bring this to the attention of the government." I looked at the plant manager sitting in one corner. He looked like a man who was at complete peace with himself. 

"We know why both of you have come here. But this factory has been here for a long time."

The meeting concluded, I looked at the audience gradually filing away from the windows and following the old man outside. Perhaps he was playing the role he had played so many times for the men at the windows. There was nothing else to be done. We would file a report on the 'stakeholder consultation' to the government after which the final decision would be taken elsewhere, much higher up. 

We made our way back to the cars. The sun was turning down for the day and the sky had turned orange. We could already hear the crickets. Each one of us walked with a buzzing cloud of mosquitoes above our heads. The manager and I slipped behind the others. "It is right that we should be shut down." It was the first time I had heard the manager speak about the factory. In the morning he had kept the conversation to pleasantries as if he had come as a tourist guide.  "But I am 44", he kept on as if talking to himself,"and I am not sure where else I could go. My in-laws are here. " Then he didn't speak again.

On the way back, I was in the front seat and B was in the back. Neither of us wanted to talk. When we hit the highway again, I turned back to look at him. He looked at me and with a snort of disdain, said "The old fool." Outside, empty trucks were passing by on the other lane, painted with bright flowers, their rear bumpers calligraphed with the  words "Horn Please. OK. Tata."

No comments:

Post a Comment