Leyland plans Rs 250 cr units

While one unit will make engines for HCVs, the other will manufacture gear boxes.

Ashok Leyland is setting up two manufacturing units at a cost of Rs 250 crore. One will make engines for heavy commercial vehicles and the other, gear boxes.

It is also introducing a voluntary retirement scheme to cut down the work force at its mother plant at Ennore in Tamil Nadu from 5,000 to 4,250.

According to a wage settlement agreement arrived at on January 31 this year, the effective work time every day per worker per shift at Ennore will move up to 430 minutes from 350 minutes.

Company sources said the wage settlement was based on an "engagement concept", and not just on the number of chasses rolled out on a daily basis.

The average output per day is expected to move up to 135 chasses a day from the present 96. The increase in the vehicle output from the Ennore plant is expected to be achieved through a third shift for the assembly plant, that commenced three weeks ago.

The company's management has also decided to make "H" series engines at the Ennore plant, with a total annual planned volume of around 40,000 units. An investment of Rs 150 crore has been earmarked for this project, which is likely to start commercial production in the next 18 months.

The "H" series engines are currently produced at the company's plant in Hosur, Tamil Nadu, with an average daily production of 288 units a day or around 86,400 units per annum.

The proposed plant to make these engines at Ennore will reach the 40,000 unit-per-annum level in a phased manner.

The new 'H' series engines would be fitted into all future rollouts from Ashok Leyland, to improve fuel economy to 4.5-5 km per litre from the present 3.5 km per litre, said company executives.

The gear box plant, to be set up in Ennore at a cost of Rs 100 crore, will manufacture 20,000 ZF gear boxes. The technology has been obtained from ZF of Germany.

The increase in the engine-producing capacity will be partly used for supplies to defence establishments and for marine and industrial applications.

The total labour cost due to the increase in chassis production as well as the new engine plant is expected to remain constant as no additional work force will be hired for this.