Tata tries spiffing up its image

Date: Saturday, January 01, 2005 2:04 PM

JOB DESTRUCTION NEWSLETTER

by Rob Sanchez
January 01, 2005 No. 1170

I sent out a happy newsletter last night but it didn't take me long to
get angry again! The article below about Tata, the largest Indian owned
outsourcer of American jobs and insourcer of H-1B/L-1 contractors, is
enough to ruin my feelings of international good-will for the entire
year of 2005.

Subramanian Ramadorai is trying to spiff-up Tata's sordid image as an
American job destroyer. He could begin by ending the discrimination
Tata routinely uses when hiring their labor force. Tata only hires
Indian nationals that are almost exclusively young Hindi males from the
Brahmin upper-caste. Tata is a classic example of a sweatshop that is
blatantly racist, sexist, and biased on the basis of national origin.

Note: To read more about Tata's hiring practices, go to the archive and
read this newsletter: "Buffaloed by TATA - Part 2 July 25, 2004 - No.
1064". You will enjoy the debate I had with Abhimanyu Radhakrishnan
about Tata's hiring policies.

A Tata PR manager revealed that only 1 out of every 10 of their US
employees are U.S. residents. You can bet that of those 1 out of every
10, almost 100% are Indian. Tata doesn't exclude only non-Indians from
being hired because they won't employ Indians that become U.S. citizens
either.

As many as 8,000 of Tata's 40,000 workers are based in the
United States. Victor Chayat, Tata's public-relations manager,
said about 700 are non-Indian U.S. residents, nearly all of
them employed in public-sector programs.

The most ridiculous part of the article has to be when they talked
about the blatant discrimination that the Siemens employees endured in
Florida when Mike Emmons, Pat Fluno, and numerous other American
employees were blackmailed into training their Indian replacements.
Tata has gotten away with their racist hiring policies only because
they are a foreign company. The following statement makes me wonder
where are the money-grubbing lawyers when we need them?

Tata's labor practices apparently were examined at that
time, without finding of fault.

Of course not everyone thinks that Tata deserves their bad reputation.
Take Harris Miller for example:

However, Harris Miller, president of the Information Technology
Association of America, praised Tata as a "high-quality company."

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://seattletimes.nwsource.com/html/businesstechnology/2002116733_tataindia12.html

Offshoring giant tries spiffing up its image

By Karl Schoenberger
Knight Ridder Newspapers

Subramanian Ramadorai has a challenging mission ahead of him: selling a
new image for India's oldest and biggest offshoring company.

Ramadorai is chief executive of Tata Consultancy Services, a huge
company that has long provided temporary labor and offshoring services
to U.S. high-tech companies.

But while Tata's workers are everywhere, the company that supplies them
to America's cost-cutting employers has managed to keep a low profile.

That is going to change soon.

In August, TCS, as the company is widely known, listed itself on the
Bombay Stock Exchange as a public company and raised $1.2 billion to
drive its growth.

However, Tata's new prominence is putting it in the crosshairs of a
passionate political backlash against an industry accused of driving
down U.S. wages and taking good high-tech jobs offshore.

"Tata is going to stand out because it's the original, like IBM or HP,"
said offshoring analyst Ravi Kalakota, president of E-Business
Strategies.

"Tata was the place to work in the 1980s, and it's the one that spawned
off all those other companies like Wipro and Infosys."

TCS is a division of Mumbai, India-based Tata Sons, which owns an 85
percent stake. The parent company dates to the 1870s, when patriarch
Jamsetji Tata started a textile mill and helped spark homegrown Indian
industry under the British Raj.

Ratan Tata is now chairman of a sprawling $21 billion family-owned
industrial concern that makes everything from steel to automobiles and
power plants and has a reputation for philanthropy and arts patronage.

TCS, however, will go down in the annals of offshoring as the original
high-tech body shop. Starting in the early 1990s, TCS blanketed the
American landscape with legions of itinerant software programmers from
India. Its young workers installed "millennium bug" patches and took on
tedious code-writing projects. And they were a bargain.

Tata pioneered an industry that eventually evolved into the dynamo of
offshoring, or sending work to cheap labor markets overseas.

Instead of strictly relying on low-wage contract workers on temporary
visas, Tata and its competitors found that long-distance digital
connections allowed them to do much of the work in India, efficiently
and at vastly reduced costs.

But with fierce competition from rivals Wipro Technologies and Infosys
Technologies, Tata developed a reputation as a sleeping giant. Indeed,
in the fiscal year ended March 31, TCS' revenues grew 29 percent,
compared with 49 percent for Wipro and 41 percent for Infosys.

Tata's IPO gives the company money to compete in the critical U.S.
market and expand in Europe, analysts say.

"Their going public was a wakeup call for the organization," said Vivek
Paul, chief executive officer of rival Wipro. "It was like a dose of
caffeine. But it remains to be seen whether that caffeine is going to
have a short-term effect or a sustainable effect on the way they do
business."

Cheap guest workers

Tata's methods have not been popular among U.S. technology workers,
however, who complain guest workers suppress local wages, and
offshoring takes good jobs overseas.

The offshoring backlash is spurring Ramadorai to try to improve Tata's
image. He said he wants to raise the company's visibility to investors
and prospective customers and at the same time spread the word about
its "corporate social responsibility."

However, Tata does not have a local hiring policy for the majority of
its business in the U.S. private sector, which accounts for about
two-thirds of its global revenues.

As many as 8,000 of Tata's 40,000 workers are based in the United
States. Victor Chayat, Tata's public-relations manager, said about 700
are non-Indian U.S. residents, nearly all of them employed in
public-sector programs.

Tata is among the prominent Indian IT companies that have partnerships
with Microsoft and develop products using the Redmond company's
software.

Tata was one of the stops on Microsoft Chief Executive Steve Ballmer's
visit to India last month, when he and Ramadorai renewed their
agreement.

One example of their partnership is a contract that Microsoft announced
Nov. 30 to help British telecommunications company BT develop Internet
services; Tata is working on the project as well.

Tata has an office in Bellevue to work with clients in the region,
including Microsoft and Boeing.

The sensitivity over Tata's public-sector work recently surfaced in
Nebraska, where the company was awarded a $7.9 million contract. A
local politician complained that Tata planned to send state Department
of Labor jobs to India, and other critics accused Tata of mishandling a
similar contract in New Mexico charges Chayat dismissed as
groundless.

The biggest blow to Tata's reputation was in Indiana, where it lost a
$15.2 million unemployment-benefits contract in November 2003 following
intense criticism. Gov. Joseph Kerman said the way the bid was put out
discouraged Indiana companies from competing, and launched an
"Opportunity Indiana" initiative to review the state's procurement
process.

Praise for Tata

However, Harris Miller, president of the Information Technology
Association of America, praised Tata as a "high-quality company."

"There have been some state contracts that have generated controversy,
but they're making aggressive efforts to hire locally," said Miller,
whose association supports offshoring and opposes legislation aimed at
curbing it.

Tata also stirred the pot in Florida in mid-2002, when Siemens, the
German telecommunications company, decided to cut costs by replacing
American employees at its facility in Lake Mary with a Tata crew.

Workers complained that they were required to train replacements who
were paid about a third of their $70,000-plus salaries and had entered
the country inappropriately on L-1 visas, which are intended for
intracompany transfers.

"The visa holders who replaced us sit at our old desks, answered our
old phones and worked on the same system and programs we did, but at
one-third the cost," laid-off worker Pat Fluno testified before
Congress in February.

The protests resulted in the introduction of legislation aimed at
reforming the L-1 visa program, which has not passed.

Tata's labor practices apparently were examined at that time, without
finding of fault.

"We have come out clean on every single one of the records compliance
issues, whether it was about L-1 visas or whatever," Ramadorai said.
"For us, this is all part of being in the business."

Ramadorai also said if Tata stands out, it is only because the company
has been in the United States far longer than its major Indian rivals,
Wipro and Infosys. Tata has made deeper inroads into the politically
sensitive public-services sector, he said.

Tata also relies more heavily than Infosys or Wipro on L-1 visas,
rather than the more conventional H-1B visa designated for technically
skilled workers.

Ronil Hira, assistant professor of public policy at the Rochester
Institute of Technology, said recent public data suggest that Tata's
imported workers in the United States were paid well below prevailing
wages for the high-tech industry here.

"But Tata has shown a lot of political savvy," Hira added. "They're
here to stay."

Information about Tata's partnership with Microsoft was provided by
Seattle Times technology reporter Brier Dudley.

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