Boeing drops Bengaluru bombshell
AVIATION & AIRPORTS

Boeing drops Bengaluru bombshell

Aerospace company Boeing has cancelled its plans to establish a manufacturing unit in Bengaluru. Instead, the Seattle, US-based aircraft manufacturer will now convert its entire 36-acre land in Bengaluru into a research and development (R&D) facility.

The decision is notwithstanding the southern city’s pre-eminence as India’s aerospace hub. The company cited muted demand because of Covid-19 as the reason for the withdrawal of plans. The state high-level clearance committee has approved the request. 

India has grown to be one of Boeing’s biggest markets. The original approval for the Boeing manufacturing plant dates back two years, when an investment to the tune of Rs 1,150 crore was planned on the land plot near the Kempegowda International Airport (KIA), making it Boeing’s largest plant outside its US facility. Boeing India employs about 3,500 people in its facilities in New Delhi, Hindan (in the NCR), Rajali (Tamil Nadu) and Mumbai, apart from engineering and technology units in Chennai and Bengaluru.

The drastic decision comes less than two weeks after a vandalism incident at a factory near Bengaluru, where employees went on a rampage. The incident took place at Winstron, the Taiwanese manufacturer of iPhone components located in Narasapura, about 52 km northeast of the IT city. The incident proved to be a can of worms, as stunned and unprepared state and central governments rushed to intervene to prevent exactly the kind of action Boeing has taken.

A key manufacturer of Apple’s iPhones, Wistron invested nearly Rs 3,000 crore in the production unit for the manufacture of iPhone 7 and iPhone SE devices. The Karnataka government had gleefully supported the establishment of the factory through a generous incentive for the acquisition of over 40 acres of land. Unfulfilled salary promises for engineers (allegedly cut from a promised Rs 21,000 to Rs 12,000) and non-engineering graduates (cut to Rs 8,000) and unfair working conditions of 12-hour workdays, and contractual rather than employment deals did not go down well with a workforce increasingly disgruntled by the continued onslaught of the coronavirus.

The Narasapura violence brought into spotlight Winstron’s questionable ethical practices. After Apple, the US owner of the iPhone, took stock of the situation, Winstron admitted to payment gaps. The company initially claimed damages of Rs 437 crore, but later, informed the Taiwan Stock Exchange that the violence did not cause significant material damage to the warehouse itself, or to the manufacturing equipment, and that the extent of the damage was around Rs 52 crore.

Companies have been grappling with human resource issues since the pandemic struck, some innovating while others have struggled to cope. The Winstron incident’s impact may prove to be deleterious if other MNCs follow Boeing, or back off from impending investments in manufacturing in India.

Image: Boeing's Bengaluru facility.

Image source: Boeing website.

Aerospace company Boeing has cancelled its plans to establish a manufacturing unit in Bengaluru. Instead, the Seattle, US-based aircraft manufacturer will now convert its entire 36-acre land in Bengaluru into a research and development (R&D) facility.The decision is notwithstanding the southern city’s pre-eminence as India’s aerospace hub. The company cited muted demand because of Covid-19 as the reason for the withdrawal of plans. The state high-level clearance committee has approved the request. India has grown to be one of Boeing’s biggest markets. The original approval for the Boeing manufacturing plant dates back two years, when an investment to the tune of Rs 1,150 crore was planned on the land plot near the Kempegowda International Airport (KIA), making it Boeing’s largest plant outside its US facility. Boeing India employs about 3,500 people in its facilities in New Delhi, Hindan (in the NCR), Rajali (Tamil Nadu) and Mumbai, apart from engineering and technology units in Chennai and Bengaluru.The drastic decision comes less than two weeks after a vandalism incident at a factory near Bengaluru, where employees went on a rampage. The incident took place at Winstron, the Taiwanese manufacturer of iPhone components located in Narasapura, about 52 km northeast of the IT city. The incident proved to be a can of worms, as stunned and unprepared state and central governments rushed to intervene to prevent exactly the kind of action Boeing has taken. A key manufacturer of Apple’s iPhones, Wistron invested nearly Rs 3,000 crore in the production unit for the manufacture of iPhone 7 and iPhone SE devices. The Karnataka government had gleefully supported the establishment of the factory through a generous incentive for the acquisition of over 40 acres of land. Unfulfilled salary promises for engineers (allegedly cut from a promised Rs 21,000 to Rs 12,000) and non-engineering graduates (cut to Rs 8,000) and unfair working conditions of 12-hour workdays, and contractual rather than employment deals did not go down well with a workforce increasingly disgruntled by the continued onslaught of the coronavirus.The Narasapura violence brought into spotlight Winstron’s questionable ethical practices. After Apple, the US owner of the iPhone, took stock of the situation, Winstron admitted to payment gaps. The company initially claimed damages of Rs 437 crore, but later, informed the Taiwan Stock Exchange that the violence did not cause significant material damage to the warehouse itself, or to the manufacturing equipment, and that the extent of the damage was around Rs 52 crore. Companies have been grappling with human resource issues since the pandemic struck, some innovating while others have struggled to cope. The Winstron incident’s impact may prove to be deleterious if other MNCs follow Boeing, or back off from impending investments in manufacturing in India.Image: Boeing's Bengaluru facility.Image source: Boeing website.

Next Story
Resources

ADCMC Launches ‘Abu Dhabi Standard for Healthcare Business Continuity’

The Emergencies, Crises and Disasters Management Centre - Abu Dhabi (ADCMC), in collaboration with the Department of Health – Abu Dhabi (DoH), officially launched the ‘Abu Dhabi Standard for Healthcare Business Continuity’ during the Annual Business Continuity and Alternative National Service Forum – Murona, held at Erth Hotel, Abu Dhabi.The initiative is a key progress of Abu Dhabi’s ongoing efforts to position itself as a global leader in the implementation of business continuity practices. It lays down a comprehensive and detailed framework aimed at strengthening the business cont..

Next Story
Resources

Hikvision Unveils Smart Swing Barriers and Turnstiles

Hikvision India has introduced the latest Smart Swing Barriers and Turnstiles for flexible entrance solutions for faster access. These entrance solutions offer advanced features and integrate many functions seamlessly as an All-in-One solution. Empowered by Hikvision's self-developed motor control algorithms, access control technology, and intercom technologies, Hikvision speed gates and turnstiles offer a diversified product portfolio with impeccable quality, stability and durability, catering to the needs of various scenarios.These Smart Turnstiles and Smart Swing Barriers are crafted with m..

Next Story
Infrastructure Urban

Fischer UltiMate™ Series Adds USB-C with Ratchet Locking System

Fischer Connectors, the global leader in high-performance connectivity solutions, has brought its world-renowned Swiss engineering expertise to the universal USB-C standard. The Fischer UltiMate™ Series, the company’s flagship range for harsh environments, now includes a pre-cabled USB-C connector equipped with Fischer Connectors’ new Ratchet Locking System (RLS). This connector provides unmatched resistance to vibration and shock, ensuring safe connections for high-speed data transfer under extreme operating conditions in sectors such as defence, mining, construction, motorsports and ra..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?