Factory closures and the pain of Sriperumbudur

Three large companies – Nokia, Jabil and BYD – in Sriperumbudur have closed down. Now, Foxconn has suspended production and workers fear that it too will shut shop soon.

Which will be the next one to close down, is the fear that grips the electronics manufacturing hub of Sriperumbudur, to the west of Chennai.

Such closures can cause social unrest and economic instability in the region, says CITU leader A Soundararajan, who represents Nokia and Foxconn workers.

First to go was Jabil followed by BYD. Their closure had a relatively minor impact in the region.

However, Nokia’s closure three months ago sent shockwaves. If Foxconn too shuts down, the region is likely to face trouble, he told BusinessLine .

Over 35,000 employees, over 90 per cent of them from rural areas, were working in these four companies . Most of them had left their vocations, including farming, masonry, hair-cutting, carpentry, electrical and plumbing to join these manufacturers at a regular salary.

With nearly 35,000 employees jobless now, every month about ₹35 crore was lost by way of salary, if the average salary was pegged at ₹10,000. These units gave indirect employment to over lakh people, including bus drivers, Soundararajan said.

An entire generation had left its family vocation to join the electronic manufacturers, said C Parandaman, a farmer living near Sunkuvarchatiram, on the Chennai-Bengaluru highway. It is going to be difficult for them to return to farming or plumbing, he said. The youngsters, on completing their 10{+t}{+h} or 12{+t}{+h} standard were recruited by the multinational electronic manufacturers which provided them a regular salary, pick-up and drop facilities, an air-conditioned campus to work in, hygienic food and uniform every year.

“What more do you need to have a decent lifestyle,” asked Vetriselvan, who used to work for Nokia and hails from Ladavaram village in Arcot district. He joined Nokia when he was 26, got married to a colleague and has a child. Both are without jobs now. It is a similar case with his friend Piraisudan from Melmaruvathur, who works for Foxconn.

“We are now sailing in the same boat. We are now 31 and won’t find jobs in any other company nor can we return to our family vocation,” he said.

Most of the women employees of Foxconn with whom BusinessLine spoke to were single and were worried that it would be difficult for them to get married, if they remained unemployed.

“Why did these foreign companies give jobs to these youngsters and leave them when they were about to settle down in life,” asked Soundararajan.

While Nokia closed due to tax-related issues and lack of orders from parent Microsoft, there is no reason for Foxconn to do so. Soundararajan alleges that Foxconn, which has a large facility inside Nokia SEZ and two smaller units in Sunkuvarchatiram and Oragadam, wants to terminate the existing employees getting a higher salary and employ people for ₹3,000 or ₹4,000.

A senior police official said it is worrying that these closures are happening in quick succession. If these unemployed youth do not find a job quickly, they will end up going in the wrong direction.

(Some of the names quoted in the story are not real. They don’t want to be identified as they were seeking employment in other companies.)