Aug 29, 2008|
Strikes, Inflation & more...
More investment = More jobs
As per a report by the Associated Chambers of Commerce and Industry of India (Assocham), corporate India has announced investment plans to the tune of Rs 10.5 trillion. This will in turn create nearly 164,000 direct jobs by 2012. Majority of these jobs are likely to come from the textiles, IT, real estate and financial services sectors. The report mentions that corporate capital expenditure will nullify the effects of any slowdown and in fact indicates the distinctly positive attitude that the captains of Indian industry hold about India.
Inflation declines to 12. 4%Also read - Inflation numbers last week
The Wholesale Price Index (WPI) based inflation declined to 12.4% for the week ended August 22, lower than 12.63% registered in the previous week. The decline can be attributed to lower prices of some minerals and fuels.
Will L N Mittal be struck by a strike?
World's largest steel maker ArcelorMittal employs more than 320,000 workers in more than 60 countries including around 18,000 workers in the US. 14,000 of these US workers are members of the United Steelworkers (USW) union. These union members have voted to give the union the authority to call a strike against ArcelorMittal, if necessary. This is a critical development as the USW has been in negotiations with the company over the current labour contract, which is set to expire on Monday. The union has said that there is a lack of progress in the talks over company's contribution towards retirement health care, a trust fund for health care, employee incentives, a profit sharing program as well as capital expenditure towards aging facilities. USW wants the terms to be akin to the one settled with another steel giant, the United States Steel Corporation.
While the union now has the option to call for a strike if they think necessary, the company says it fully intends to reach a satisfactory agreement. It may be noted that a strike across the US would be one of the largest seen in the steel industry in years.
We hope the steel industry in the US does not tread the same path its auto industry took. Labour unions secured massive retirement and health benefits from the auto industry over the years, eventually breaking the back of the giants. Charlie Munger has observed how 'deprival super-reaction', the tendency to secure as much territory that a person perceives as his own, causes labour unions to secure deals which make the companies unviable and leads to unemployment in the long run.
Also read - Steel Industry: Key Growth Drivers
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