Tyre maker Dunlop India, which has suspended operations at its Ambattur unit here due to labour unrest, today said it plans to restructure the facility under associate company Falcon Tyres after settlement of the dispute.

“We are looking at an early settlement of the discordant issues with workers of the Ambattur plant. It will be followed by a thorough restructuring of operations at the plant, which includes laying off some employees,” Dunlop management sources said in an email to PTI.

The Kolkata-based Ruia group-promoted Dunlop India assured there would be no effect on employees’ motivation under the new management.

Dunlop India said if the the plant has to run profitably and operations made sustainable, the workforce would have to downsized. “The new workforce will function under a new management system under Falcon Tyres,” it said.

Asked if the company had adopted a wrong strategy to handle labour issues, the company admitted that restructuring and downsizing of employees should have been completed in October 2009 itself, ahead of its plant’s reopening.

The company reopened the Ambattur plant in the third week of October, 2009, after reaching a settlement with the labourers in July, 2009.

“The plant is capable of producing truck and bus tyres and when it reopened (in October 2009) the management planned an early resumption of manufacturing of these products. The workers assured us of cooperation in lowering cost of production. But the assurance remained only on paper,” the company said.

Noting that operations at the Chennai plant are now being outsourced, it said they are keen on utilising the plant’s full potential and not the loss caused due to the labour unrest.

The company attributed the “increasing indiscipline” of the workers forced the management to suspend all operations.

Dunlop India had on Wednesday announced suspension of operations at its Chennai plant due to labour unrest. The company has about 500 workers at the plant, which produces 90 million tonnes of rubber products.

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