The Hindu Business Line : Dunlop suspends work at Sahagunj facility

Kolkata, Nov. 30 Activities have been suspended at the Sahagunj facility of Dunlop India after two years and one month of its re-opening on October 31, 2006.

While production was temporarily suspended in the facility since November 17, the management issued a “suspension of work” notice at the factory this morning.

Work is already suspended at the other facility of the company at Ambattur in Tamil Nadu.

After “failure of rounds of prolonged discussions with the labour unions” on the proposal to temporarily suspend production while paying each worker a subsistence allowance (“solarium”) of Rs 2,000 a month for the interim period, “the management of the company is constrained to declare suspension of work at its Sahaganj plant with effect from Sunday, November 30, 2008,” a company press release said.

“The management would like to reiterate here that it remains committed to resume production at the plant at the earliest once a consensus is arrived on the pending issues,” the release added.

State’s promise

Reacting to the development, Mr Anadi Sahu, West Bengal Minister of State for Labour, on Sunday said that the State Government would take all initiatives to re-open the factory. He, however, did not promise any bailout package to resolve the financial crisis faced by the company.

Dunlop previously reported that a crippling working capital crisis, coupled with heavy erosion of margin in the tyre industry during the last few months, has made production unviable in the factory. The company had also approached the State Government for a bailout package, including exemption of sales tax and other duties and working capital finance of Rs 115 crore.

Cash starved

According to the company, a 10-member committee representing all labour bodies was appraised that the company was not in a position to pay the salary for October and keep the production going till finances are arranged before March 2009.

As an alternative to suspension of work, Dunlop proposed that the production be temporarily suspended and offered a monthly payment of Rs 2,000 to workers for the interim period for which they wouldn’t be required to report for duty.

However, the proposal did not find much favour from the workers who demanded immediate payment of the October salary and a State guarantee for resumption of production at the factory, leading to a stalemate.

Though suspended production began on November 17, the following days witnessed hectic activity on the part of Dunlop to convince the trade unions as well as the State Government on the necessity for such a step. A meeting with all the labour representatives in this regard on November 28 also proved inconclusive.

Related Stories:
Dunlop’s Sahagunj unit headed for temporary closure
Dunlop’s Sahagunj facility halts on power supply cut
Still awaiting fiscal incentives: Dunlop

More Stories on : Human Resources | Tyres

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