The Dunlop India management will seek endorsement from the West Bengal government on the salary to be paid to the workers post-suspension of production, at the behest of the unions.
Addressing a press conference, Pawan Kumar Ruia, chairman, Dunlop said that the management had agreed to government endorsement and the agreement would be signed in the presence of the Labour Commissioner some time next week. The management would also meet labour minister, Mrinal Banerjee, tomorrow.
Ruia today cleared the air over the suspension of production at Dunlop Sahagunj factory, six days after it was announced. He said that the production had been halted temporarily and till production resumed workers would get Rs 2,000 per month, maximum up to March 2009. Ruia explained that it was likely that production would be resumed much ahead of March.
The company was studying the production that the factory could carry on to achieve the breakeven point.
Ruia said, the production capacity of the factory was 130 tons across Sahagunj.
At present, the factory was ready with 90 tons but production would be resumed with breakeven production levels.
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Dunlop requires working capital of around Rs 70 crore to restart the factory and had already approached banks. Ruia said, the funding would requirements would be met in the near term. Till date, the investment in Dunlop by Ruia was to the tune of Rs 500 crore. He said, due to the government’s actions in India, the liquidity with banks looks to be improving but still banks and financial institutions had no risk appetite. “This has delayed in organizing of working capital by the banks resulting in temporary shut down of the plant.”
To tide over the interim period, not just workers, salaries for management and staff had also been rationalized proportionately.
Ruia said, the company had two options for reducing labour costs : suspension of operation with no wages or pay an agreed amount to each and every worker every month, a subsistence allowance. “The company went for Option b because of the human angle and the wonderful working relationship that the management enjoys with the workers.”