Bajaj statement on Akurdi Plant status

With a view to clarify varying reports concerning the current state of the Akurdi (Pune) Plant, Bajaj would like to convey the following: "�

1. The Akurdi Plant is currently witness to a 2-day shutdown and will, from Saturday 1st September, be completely shut down.

2. Thus no vehicles will be produced at this Plant from September 2007 onwards. Component production for supplies to other Plants will continue, as will all other Corporate functions.

3. In the last labour settlement dated 5 th September 2003, it was agreed that in the event of an acute drop in demand for the products produced at the Akurdi Plant, a 5-day working week would be observed, and that for the 6th day of the shutdown workmen would receive 50% of their wages.

Thus with the Plant being completely shutdown from September 2007 onwards, all workmen will continue to receive 5 ½ days' wages per week for doing absolutely no work. Hence any suggestion of unfairness on the part of the Management is entirely unfounded.

4. The Management would be well within its rights to have all such workmen report to the Plant, as per their normal shift timings, 5 days per week. However, for the time being, even this requirement is being waived, primarily in the interest of the convenience of the workmen. As such, all workmen will be virtually receiving their normal wages without having to leave home.

5. It is true that the above mentioned settlement has technically completed its tenure on 28 th February 2007, and the Management has for the past several months been discussing a new settlement with the Union. This discussion has to take cognizance of the circumstances mentioned above.

6. Furthermore, there has reportedly been much speculation about an impending VRS, and the Plant closure is being projected as a means of arm-twisting workmen into accepting such a VRS.

7. The fact is that there is no VRS planned. Furthermore, it is well known that over the past few years, in the process of responding to the intensifying competitive situation, the Akurdi Plant has been through several VRSs, all of which were generously formulated and sensitively executed.

8. Needless to say, Management is hopeful that through a pragmatic and result oriented dialogue with the Union, an appropriate long term solution can be arrived at quickly and amicably.

Finally, and most importantly, it must be reiterated that the Akurdi Plant closure is necessitated not for any failure on the part of the workmen or the Management, but largely due to the impact of Government policies on capacity rationalisation, chiefly the regional distortions created by inconsistent tax benefits, and the continuing evil of octroi in the State of Maharashtra in stark contrast to most of the rest of the country that is free from it.

Rajiv Bajaj.

MD, Bajaj Auto Ltd., Pune.

Wednesday, 29th September 2007.