This formula is not written in the little red book. But a trade-unionist-turned-industries-minister in Kerala has found a unique way to turn around a perpetually loss-making PSU.So, after convincing trade unions on the importance of performance-based incentives and a no-wage-revision policy for three years, Kerala’s minister Elamaram Kareem is talking to potential markets for United Electrical Industries Limited which makes multi-function electronic meters.That’s where ideology is promising to help. The shortlisted markets: West Bengal and Tripura in India. And, possibly, Vietnam and Cuba. The state government has initiated talks with fellow comrades in power elsewhere.First, the turnaround story. The minister and his team managed to convince the warring unions that the company needed to change the way it worked. They introduced new production facilities and got the 400-odd employees to agree on a performance incentive system.The unit which never made more than 16,500 meters a month till last year is now producing 1.6 lakh a month. It expects to touch 1.8 lakh soon. Last fiscal, the unit had a turnover of Rs 46 crore against Rs 7 crore the year before. The unit, which has a paid-up capital of Rs 4 crore, made a profit of Rs 1 crore in 2006-07. “Assembly-line production, a disciplined work force and diversification helped the turnaround,” says John Mathai, former chief secretary and chairman of the Restructuring and Internal Audit Board, Department of Industries and Commerce, Kerala. While it never used to supply enough meters to its captive buyer, the state electricity board, which buys 1 lakh meters a month, now it has surplus production. With the introduction of multi-function meters with a memory to store reading of up to six months, the demand has gone up. “We are on a drive to sell the meters. The Government is holding talks with West Bengal and Tripura governments. We are also exploring the overseas markets in countries like Cuba and Vietnam,” says Kareem. While CITU at the national level continues to make noises about the Centre’s move to link pay to performance, its former leader Kareem says that’s the way out.Kareems’ logic is simple. “We need to understand the reality of globalisation. While doing so, we can revive the sick PSUs by taking the employees of the units into confidence”. Kareem says the number of profit -making PSUs has gone up from 12 to 22 in just one year. “On this front, we are faring better than West Bengal,” he adds.
