The Hindu Business Line : FACT staff not keen on VRS

THE question of sustenance after taking up voluntary retirement seems to have become a dissuading factor for the employees of the Central public sector Fertilisers and Chemicals Travancore Ltd (FACT) who are reluctant to opt for VRS.

The management has floated the latest voluntary retirement offer aimed at retiring 1,000 employees to bring down the strength to 3,200. However, it has not evoked any response, according to official sources.

The VRS offer has been made only to non-technical staff who do not want to retire, while the technical personnel who wanted to opt were not given the chance, the sources told Business Line.

They said that for the non-technical employees getting an employment outside was difficult. Besides, the return on whatever money left with them for investment is too meagre. Added to this are the psychological problems that would crop up in such a situation, they said.

The ailing company, which had 9,400 employees in 1994, has around 4,200 now following a mass retirement under VRS. The management wanted the strength to be reduced further to 3,200, they said.

According to some technocrats, by VRS alone no establishment has so far made any turnaround. Citing the example of Bharat Electricals Ltd , which had turned around by adopting new technology, they said, "FACT could be turned around by capital restructuring and with some minor modifications."

The manpower cost of the company has come down now to 3-5 per cent of the total expenditure. Its loss is around Rs 200 crore a year, while the annual outgo on wages is around Rs 70 crore. Of the loss, Rs 150 crore is on account of depreciation of assets and interest on previous loans. The operating loss is around Rs 60 crore.

They expressed the view that if the existing loan is converted into equity it would help to improve the situation. The main reasons for the company's current crisis are problems with product marketability, high cost of production, previous loan liabilities and changes in the Government policies.

They said that the management had gone for expansion when subsidy was available for ammonium sulphate. And a year later the Government had withdrawn it and as a result, the company had incurred a loss of Rs 540 crore.

The recent poor financial performance could not therefore be attributed to the manpower cost. "If the other major issues, such as loan liability, were addressed the company could be revived without reducing the staff strength further," they claimed.

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