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Our Bureau

Chennai, Nov. 18 The Dunlop Factory Employees Union and the Dunlop management have set a six-month deadline to allow all the workers at the Ambattur factory to exit through a voluntary retirement scheme (VRS) if production does not start, according to sources in the know.

In the interim period, the management has agreed to pay each of the workers Rs 2,700 a month as allowance for the six months starting from October.

This agreement will be formally signed between the union and the management in the presence of the Tamil Nadu Labour Department officials on Thursday, according to sources.

Workers’ representatives said there are over 734 workers on the payroll and the DFEU has agreed to negotiate the settlement for a VRS over the next six months. They had been paid just 50 per cent of their salary since June when there had been no production because of working capital shortage. Over the last two months the issue had been before the Labour Department officials for a settlement.

Meanwhile, the management, which had hoped to restart production in October, could not do so and had last week told the workers not to report for duty from Monday. However, the DFEU had not agreed to the proposal and insisted on a formal agreement.

However, according to management sources, it does not necessarily mean that the Ambattur factory is to be shut down. Once the financial issues are sorted out and the market picks up, the management will examine options of restarting the factory. A new labour force would mean lower cost to the management.

In December 2005, the Kolkata-based Ruia group acquired Dunlop from the Jumbo Group. The factory had not been under production for over eight years at that time. The acquisition by the Ruia group was expected to see the Dunlop brand revive but financial constraints continued and the factory never saw full production.

Over 180 workers opted for an ‘early retirement scheme’ after the takeover and were paid between Rs 75,000 and Rs 1.24 lakh. The workers who opted to stay agreed to a 20 per cent cut in pay, according to sources in the union.

Meanwhile, the All India Tyre Dealers’ Federation has said in a press release that the Dunlop management cannot blame its problems on the economic slowdown or drop in demand.

The depreciation of the rupee has led to a slowdown on tyre imports and a spurt in imports resulting in a shortage of over 1.50 lakh tyres a month in the replacement market. The federation has urged the Tamil Nadu and West Bengal Governments to intervene to ensure production resumes.

More Stories on : Trade & Labour Unions | Tyres

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