Kolkata: Beleaguered tyre maker Dunlop India Ltd is weighing options on whether to sell a closed factory in Ambattur near Chennai and retrench all workers at the unit, its top official said.
Most of the 700-odd employees of the 32-acre Ambattur factory are willing to leave if they are offered a good severance pay, chairman Pawan Kumar Ruia said on Monday. “We haven’t taken a final decision yet on whether to move the factory (from Ambattur) or restart operations there,” he said, adding that getting a buyer could be difficult in current market conditions.
Dunlop is fighting lawsuits with VGN Enterprises, a property developer, over a 2004 sale of 60 acres belonging to the truck and bus tyre-making factory by Manohar Rajaram Chhabria-led management.
Weighing options: Pawan Kumar Ruia, chairman, Ruia Group. Indranil Bhoumik / Mint
Ruia took over Dunlop from the Chhabria group in 2005, and a year later briefly reopened the Ambattur factory for maintenance.
In October, Dunlop entered into an agreement with its employees’ union at the factory to pay Rs2,700 a month to each worker till March 2009. They were asked not to report to work and the factory remained shut.
Asked whether Dunlop was looking to sell part of the Sahagunj factory in West Bengal as well, Ruia said the company had no immediate plans to do so, adding that it could “if it had to do so for survival.”
Dunlop has around 212 acres in Sahagunj, of which its factory occupies only 58 acres. The rest houses employees, but Ruia said most of the company’s staff quarters are being occupied by trespassers.
The Dunlop management, which recently reopened the Sahagunj factory for maintenance, has also decided to make a payment of Rs1,000 to each worker. Dunlop is negotiating with employees’ unions at Sahagunj for a wage agreement, and “this amount would be adjusted against the final wages agreed upon between the unions and us,” Ruia said.
Dunlop has around 1,170 employees at the Sahagunj factory.