Financial Daily from THE HINDU group of publications
Tuesday, Jul 02, 2002
Balancing VRS with revival is NTC's headache
COIMBATORE, July 1
WHEN the question of handling voluntary retirement scheme (VRS) comes, the cash-strapped National Textile Corporation's dilemma in man management (or human resource management) is no different from other public sector enterprises.
How to retain talent even while it has to continue the VRS programme to its logical end, is the NTC's unenviable task today. The sick textile monolith has to achieve this without dislocating the revival scheme meant to be completed within next two years.
If NTC has to survive as a Government textile enterprise, it has to financially revive 53 textile units that are found viable out of the 119 units under its fold. But to revive the 53, NTC has to successfully close down the other 66 units diagnosed as unviable, get its voluntary workers separation process go unhindered and the sale of assets of closed units and the sale of surplus lands in the viable units realised. The challenge for NTC is all these are to happen concurrently on time if the revival plan is not to be derailed yet again.
However, for the crisis management group in NTC's holding company in Delhi the immediate challenge seems to be motivating the workforce in the 53 viable units slated for revival and their functional heads on the goings on so that these units remain on feet and earn to keep the corporation's cash flow running.
Left to fend for itself for its massive revival-cum-restructuring scheme that would cost anywhere around Rs 3,500 crore, the NTC management feels that taking its officers and men into confidence through a `sensitisation' programme will be a better route to keep the morale of the staff at this critical phase so that the demotivation of workers in the units slated for revival does not do a spoil-sport to its revival programme.
"The piquant situation faced by NTC now is that it is swarmed with the requests from the workers and employees in the units meant for revival too seeking VRS introduced for the non-viable plants. Whereas, NTC already finds the task of getting the required funds to foot the VRS expenses difficult as the surplus land disposal conceived to fetch the much-needed funds to the NTC's revival is not coming through easily in the face of hardened real estate market," said Mr K. Ramachandran Pillai, Whole-time Director (Human Resources) of NTC headquarters in Delhi.
Mr Pillai, who was here to participate at the first ever `sensitisation' programme organised in recent times at the NTC staff college here for the chief executive officers of the NTC mills from the nine subsidiaries across the country, said that as on date, of the 66 units earmarked for VRS-cum-closure-cum disinvestments, 20 units were already closed and the workers in these units were paid VRS compensation of Rs 156 crore.
"The question before the corporation now is to how to find the funds estimated Rs 800 crore needed to pay the VRS compensation for the workers in the remaining 46 units meant for closure," Mr Pillai told newspersons.
NTC has proposed to cover about 35,000 out of is total 73,000-odd workers and officers employed in the nine-subsidiaries in the voluntary separation scheme to bring down the number of workers to a viable limit. NTC has chosen to offer VRS to the entire non-viable plants and to workers of selective viable textile units as well and as on date the number of workers eased out through VRS was some 4,800.
The corporation has engaged external consultants including the ICICI Home Loans for valuation of its land assets. At least 50 per cent of the valuation process for 20 closed units has been gone through. According to Mr Pillai, the total funds required to foot the VRS expenses is estimated around Rs 1,700 crore.
He felt that even as the corporation was trying to bring down the number of workers, it had to keep the morale of the employees in the 53 viable textile units in tact so that the revival programme was imparted meaning, especially when the disinvestments process rests on the continued running of the viable plants. One way of achieving this is through the process of training the chief executives and functional heads attached to individual unit levels that could be broadly sensitised on issues of the VRS/post-VRS scenario in NTC as a whole. The issues to be covered in such executive training programmes are highlighting the need to maintain productivity levels, lowering labour costs (which at present in NTC units average around 20 per cent) and marketing.
Pending completion of the revival scheme, NTC has entered MoU with its workmen unions for a freeze on wages for two years. Maybe, NTC would also be moving towards evolving a uniform wage pattern for all the subsidiaries post-revamp.
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