As I have noted elsewhere, the politician-union-gov't employee triangle means that politicians and unions use gov't companies and job guarantees to hire future voters and union members. 3 people do the job of 1 person. Gov't companies can run loses because the tax payers are blindly paying for it. If Bajaj and Hero compete, sometimes Hero will win, sometimes Bajaj. When one wins, it hires more people, when the other loses it has to fire people. Neither company can read the crystal ball and predict how the market will react to their bikes so they cannot guarantee jobs. If oil price goes up, both will lose their 125cc market. If they can't fire people during bad times, they will resist hiring too many during good times - and use contractors instead. Unions should become employment agencies, make a commission on skilled workers and move them from Hero to Bajaj, if bike market fails, move them to Tata cars. Unions can use the commission money to train employees. Gov't can offer to pay smart companies that hire unemployed workers as a means of fulfilling their constitutional commitment rather than forcing workers to stick with bad companies through job guarantees.
