Date:25/11/2008 URL: http://www.thehindu.com/2008/11/25/stories/2008112552651600.htm

Business

Dunlop applies for State government loan

Special Correspondent

Asks workers to accept subsistence wages for sometime

Mrinal Banerjee to meet unions on Tuesday
Ruia wants to fix new production norms

KOLKATA: The Chairman of Dunlop India, Pawan Kumar Ruia, on Monday said that the company had applied for a Rs. 100 crore loan from the State government to tide over the present funds crisis that had forced it to suspend operations at its mother unit at Sahagunj in West Bengal and asked workers to accept subsistence wages.

“I have apprised the State Labour Minister Mrinal Banerjee that this is only a temporary phase caused due to a working capital crisis with the banks and there is no dearth of demand for Dunlop products,” he told reporters after a 35-minute meeting with the minister at the State Secretariat.

Mr. Banerjee will hold another round of meeting with the unions on Tuesday. The loan application was filed three weeks ago with the West Bengal Industrial Development Corporation.

Praising the 1,149 workers at the Sahagunj unit, Mr. Ruia said that they did not have any mindset problems.

However, he conceded that his efforts to raise production to a certain tonnage at the unit had been frustrated at least thrice. Mr. Ruia said that while asking the workers to stay at home on subsistence wages of Rs. 2,000 a month for sometime, he would also like some new production norms to be set.

On the company being impacted by the global slowdown, the chairman said that selling 40 tonnes of Dunlop products is no problem at all but finding the cash for sustaining operations has become a problem.

In a statement on Sunday, Mr. Ruia said that he had brought the company out of the Board for Industrial and Financial Reconstruction (BIFR) and had refurbished production and had started paying the workers their salaries, spending Rs. 500 crore on the company.

In the wake of the financial crisis, the company had effected cost controls and rationalised salaries.

However, it did not go for a work-suspension but took the path of paying subsistence wages after talking to the unions.

The Ambattur unit of the company is lying closed for quite a few months now.