Dipan Chowdhury can still recall how he was hailed by his family and friends after he managed to bag the job of a machine operator in Dunlop’s Sahaganj plant in 1981. It was a time when aspirants preferred jobs with the tyre-manufacturer over prized government ones. Chowdhury, now a supervisor in the company, is among hundreds of tense faces lined up outside the factory gate at Sahaganj unit of Dunlop India Ltd (DIL), protesting against the recently issued suspension of work notice by the management which has robbed him and his 800 odd colleagues of their employment.
At one point, things had looked unquestionably promising. After financial difficulties forced the factory to close its gates in the late 90’s, the company got a fresh lease of life when Pawan Kumar Ruia acquired the firm in 2005 from Manohar Rajaram Chhabria’s Jumbo group.
Ruia successfully won the confidence of the workers during his very first visit to Sahaganj on a Sunday morning in December, 2005. He held his first meeting with workers after forcing the BIFR-appointed security people to open the factory gate. This was the dawn of a new, more promising era, it seemed. “It was a grand welcome for Pawan Ruia. Every family member of the workers came out to see him. In the first couple of months, he used to visit the plant almost every other day. He himself used to give instructions to the workers to bring the factory in shape before the formal re-opening of the plant,” recalls Chowdhury.
Pawan Ruia—already tagged as some kind of turnaround artist and a sought after man for a government grappling with sick companies—sparked an ember of hope in everyone. After all, he had previously turned around the public sector entity Jessop & Co, an engineering company, in 2003— followed by Mysore-based Falcon Tyres Limited as well as Maharashtra’s Monotona Tyres Ltd, in 2005 and 2008 respectively.
The Sahaganj factory reopened in 2006 and Ruia successfully took Dunlop out of the purview of the Board for Industrial and Financial Reconstruction (BIFR) in 2007 by revaluing its fixed assets. But not for a single day has there been full production in the factory. Moreover, the workers say that they have experienced all kinds of hurdles — stop-work notices (in 2008 and the recent one), closure of the factory in March 2008 as West Bengal State Electricity Distribution Company Ltd (WBSEDCL) stopped supply to the unit for not clearing dues and two days’ lay-off notice earlier this year.
The workers now feel cheated. “There was a lot of talk about revival of the plant in 2006. But nothing has happened. They promised production of 75 tonnes a day in the project report submitted to the government. Since then, highest production in a day has been abot 30 tonnes, while the average was about five to 10 tonnes. And since October last year, there has been no production. And now he wants to shut down the factory with this stop-work notice,” a worker said. Both, Sahaganj and Ambattur (Tamil Nadu) plants of Dunlop have production capacity of 90 tonnes a day.
The move has led to a sitin demonstration by the workers irrespective of their affiliations to the Centre of Indian Trade Unions (CITU), Indian National Trade Union Congress (INTUC) and Indian National Trinamool Trade Union Congress (INTTUC).
According to a company statement, it was the “criminal activities” by “recalcitrant workers” that led to the decision. “The company had attempted to raise funds to pay wages by transferring raw material inventory to another group company (Monatona Tyres which makes twowheelers tyres in Maharashtra). But workers were not cooperating with the management for the transfer of raw materials, which would have generated cash for the payment of wages,” a spokesperson for the company said on the notice.
WBSEDCL has also stopped supplying power to the factory following the nonpayment of dues. The tyre company wanted the thenowners, the Chhabrias, to clear dues of about '15 crore for the period between 2000 and 2005, even though the plant remained closed during the time. Truth is, while the supply was not suspended by WBSEDCL, understandably due to political pressure, the power was consumed by neighbouring locals.
Following the takeover, Ruia was initially unwilling to pay up. Finally, he agreed to pay over a period of nine years. Now, as the factory is closed again, however no payment has been made by the company and as a result the its lights have quite literally been turned off.
On the other hand, the company is also awaiting the Pollution Control Board (PCB) approval for its 50-Mw thermal plant at Sahaganj as captive power generation that would bring down the production cost.
Meanwhile, workers feel that Ruia has lost interest in Dunlop. Pointing to the recent foreign acquisitions by Pawan Ruia and his decision to step down as chairman and director of Dunlop, former CPI-M MP and president of CITU-led trade union at Sahagaunj, Shantashree Chatterjee says, “Ruia does not seem to have any intention to run the company. In the name of shifting raw materials, they have started dismantling the machinery.” The West Bengal government which is pushing Dunlop to restart operations at Sahaganj, also shares the same sentiment. “I have personally met Mr Ruia on the matter. They are citing law and order issues. We are ready to extend all kinds of support. I visited the factory recently at the request of the workers. I found many of the units dismantled. Mr Ruia should first make his intention clear whether he wants to run Dunlop or not,” said state labour minister Purnendu Bose, who along with commerce and industry minister Partha Chatterjee has been negotiating with company officials for reopening the factory.
The company official denied any such intention highlighting that it has regularly paid wages to its idle workforce.
There are also reports that Dunlop India has initiated proceedings that would transfer its rights and trademarks to Ruia Sons Pvt Ltd, the flagship holding company of Ruia. However, the company spokesperson declined to comment on the matter.
Workers describe this move along with Ruia’s decision to step down as a strategy to distance himself from the company which is entangled in all kinds of problems. Company officials say that he intends to focus on overseas business, which contributes nearly 50 per cent to the Ruia Group’s turnover. He has acquired as many as six auto component manufacturers in Germany, France, the UK and Turkey since 2008, transforming it into a '7500 crore group. According to a former top official of the company, most of Dunlop’s fixed assets including Sahaganj factory has been pledged with the lenders. According to him, rising input cost is also a cause of concern, which has affected the production of Dunlop’s Amabattur plant too. In fact, when the lay-off notice was issued in Sahaganj by the management earlier in April this year, spiralling raw material (rubber) prices was cited as one of the major causes.
Meanwhile, the state government has met the management of Dunlop to mediate and find a solution to the lockout at the company’s Sahaganj unit. The company has asked the government to allow them to set up the proposed power plant at Sahaganj, to which state commerce and industry minister Partha Chatterjee said, “the firm’s diversification plans are under our consideration but it will take some time.” An independent agency is likely to be appointed by the company to assess the viability of production and labour requirement at the Sahaganj plant. Employees are now looking ahead to the managements decision following a board level discussion scheduled on October 21. Yet, Ruia will perhaps have to do a lot more than just make promises if he wants to to win back the confidence of his workers.
Dunlop workers were recently issued a ‘suspension of work’ notice, dashing their hopes of witnessing a turnaround at one of India’s oldest tyre companies.
Pawan Kumar Ruia was once thought of as Dunlop's savious. But after years of anaemic production and a 'suspension of work' notice issued recently, the future of one of India's oldest tyre companies hangs in the balance. Turnaround specialist Pawan Ruia has been unable to engineer Dunlop’s revival.
Workers describe Ruia's decision to step down as a strategy to distance himself from the company which is entangled in all kinds of problems. Company officials say that he intends to focus on overseas business, which contributes nearly 50 per cent to the Ruia Group’s turnover.
