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Bajaj’s Akurdi plant will stop production; unions to move court

Bajaj’s Akurdi plant will stop production; unions to move court
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First Published: Sat, Aug 25 2007. 04 08 AM IST

Tough ride: Rajiv Bajaj, managing director, Bajaj Auto Ltd.
Tough ride: Rajiv Bajaj, managing director, Bajaj Auto Ltd.
Updated: Sat, Aug 25 2007. 04 08 AM IST
Two-wheeler manufacturer Bajaj Auto Ltd on Friday said it will stop production of vehicles at its factory at Akurdi here from 1 September, even as workers’ unions are threatening to move court.
“Akurdi motorcycle production has already been shifted to Waluj (in Aurangabad district), and that of the Bajaj Kristal (a scooter) will be shifted this
Tough ride: Rajiv Bajaj, managing director, Bajaj Auto Ltd.
month,” said Bajaj Auto managing director Rajiv Bajaj in an email response. He added that this has become necessary because the Akurdi plant has become unproductive despite the best efforts of the workmen and the management. “This owes itself primarily to two reasons: the absence of any tax incentives and the continued presence of octroi (a local tax). The latter is particularly unfortunate, specially when Maharashtra is supposed to be India’s most progressive state. Octroi not only directly costs us a few hundred rupees per vehicle, but also leads to logistics nuisances,” Bajaj said in the email.
The Akurdi plant will continue to serve as the company’s head office and also house functions such as research and development, engineering, marketing, finance, international, human resources, commercial, etc., Bajaj said.
Bajaj’s statement comes in the wake of an employee circular put up a couple of days ago at the Akurdi plant implementing a four-day working week for 1,500 shop floor workers. The company employs a total of 2,200 shop floor workers at Akurdi and 6,500 overall. According to C.P. Tripathi, the company’s vice-president for operations, the workmen would be paid for only five-and-a-half days in a week compared with six days earlier. The amount of money the company would save because of this isn’t known.
Two of the three rival unions at the plant have said they will approach the courts. Dilip Pawar, president of the Vishwa Kalyan Kamgar Sanghatana (VKKS), an independent union, said the union is seeking legal advice on the issue and will take the company to court. “We were making over 2,000 vehicles at Akurdi till April when they shifted out production of the CT100 and Platina (both motorcycles) to Pantnagar (in Uttarakhand). The company has been shifting work out of here and out-sourcing it or taking it away to other locations over the last couple of years so it is not correct to say that we have no work,” Pawar added.
Nana Kshirsagar, president, Maharashtra Kamgar Sena (MKS), which broke away from another union—the Bharatiya Kamgar Sanghatana, a Shiv Sena-backed outfit—said the union?would?file?a?case?against Bajaj Auto on Monday, under the Industrial Disputes Act, asking that workers be paid in full and not for part of the week.
The three unions have been fighting it out to be recognized as the ‘official’ union at the plant.
Production at the Akurdi facility has declined over the years.
Rajiv Bajaj had spoken of the plant’s unimpressive performance at the company’s annual general meeting in June. He said that the 2,200 workers in the plant produced 50,000 vehicles while Bajaj’s new plant at Pantnagar was producing 1 million vehicles with just 500 workmen. Bajaj told shareholders at the AGM that he was in favour of shutting down the facility but that existing labour laws made it impossible for the company to do so.
Employees at Bajaj Auto have been offered several rounds of voluntary retirement schemes in the past as part of the company’s plans to reduce workforce at the plant. VKKS’ Pawar claimed that the company was harassing workmen by transferring them out. “Most of the workers here have put in more than 35 years of service and it is not possible for many of them to now uproot and go away to Pantnagar or any other location,” he said. “This is just a ploy so that they can arm-twist us into taking voluntary retirement and do away with us since we are an ageing workforce,” he added.
In his email, Rajiv Bajaj said that the company had several options available in terms of addressing the issue of idle staff and workmen. “We will make the appropriate decisions in the coming weeks,” he added.
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First Published: Sat, Aug 25 2007. 04 08 AM IST