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Dunlop's Ambattur unit to re-start

By Our Special Correspondent

CHENNAI OCT.1. The `holding operation', suspended since April 2001, at the Ambattur facility of Dunlop India is set to recommence yet again.

This optimism follows the signing of a memorandum of settlement (MoS) between the company management and representatives of the Dunlop Factory Employees Union of Ambattur here today. The MoS was penned in the presence of the Tamil Nadu Minister for Labour. The MoS is arrived at in the hope that the rehabilitation scheme, now pending with the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), will go through and that it will have the blessings of all concerned.

The MoS provides for alignment of costs to the industry norms and introduction of highest productivity standards. A move for voluntary retirement scheme (VRS), a proposal for outsourcing non-value added functions and an agreement for payment of back wages in a phased manner so as to avoid adverse impact on working capital formed the core of the MoS. The city unit has a workforce of about 1700.

A release from the company quoted Komal C. Wazir, a director of the company who represented the management, saying that the MoS would help get the draft rehabilitation scheme approved speedily. She asserted that cost competitiveness was crucial for the survival of Dunlop given the current market realities. She expressed optimism that the Tamil Nadu Government would extend the requisite relief to Dunlop so that the Ambattur factory was placed on a firmer footing. Dunlop had also begun discussions with the unions for re-opening holding operations at Sahagun factory in West Bengal as well, she said and hoped that a settlement would be reached sooner than later.

Citing the successful turnaround of Falcon Tyres, another outfit of the group that too had fallen into the BIFR fold, Ms. Wazir saw "no reason why Dunlop should not attain such superior levels of performance once these settlements are in practice.'' Indications were that the Ambattur facility would make products for sister firm Falcon Tyres upon supply of raw materials on a `toll basis'.

An assortment of factors ranging from working capital constraints to high input costs and excessive manpower had all spelt trouble, resulting in stoppage of operations in February 1998. Dunlop walked into the BIFR fold in June 1998. On the prodding of Board for Industrial and Financial Reconstruction (BIFR) — which had sensed the possibility of reviving Dunlop — the late Chairman M. R. Chhabria had brought in Rs.26 crores to put in motion `the holding operations'. Accordingly, the holding operations commenced at Ambattur factory in February 2000 and at Sahagunj in March 2000. That had lasted only 10 months, though. Mounting losses, however, had forced the suspension of holding operations in April 2001.

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