Thursday, Oct 30, 2014

HM impasse: Labour dept convenes tripartite meeting

car-main Ambassador cars parked near a workshop for repairs in Kolkata, Monday. AP
Press Trust of India | Kolkata | Posted: May 27, 2014 3:47 am | Updated: May 27, 2014 3:54 am

The West Bengal labour department Monday convened a tripartite meeting on Tuesday to break the impasse at Hindustan Motors, which declared indefinite suspension of work at its Uttarpara plant two days ago signalling the end of road for its Ambassador car and an uncertain future for its nearly 2,500 employees.

“The Labour Department has convened a tripartite meeting Tuesday at the Deputy Labour Commissioner’s office on Hindustan Motors,” Labour Commissioner Javed Akhtar said.

“The company has declared suspension of work at the Uttarpara plant. We can always dissuade the HM management to lift the lock-out,” Akhtar said.

In a notice pasted on the factory gates Saturday night, the company announced the indefinite production of suspension of Ambassador car and a halt in the payment of salaries to its 2,500 employees.  It plans to reopen the factory after settling debts and restructuring. The Uttarpara plant of HM is India’s oldest car factory.

Meanwhile, HR professionals said that no management can declare a closure or lock-out due to reasons like funds crunch or lack of demand of products. “In case of financial crisis or demand fall, the workers are not at all responsible and it is the failure of management to study the market conditions and act accordingly,” a senior HR professional said.

Declaring a lock-out for reasons like these were not legally tenable as they were not labour-related and could be contested in court, he said.

Meanwhile, the company maintained that it was not possible to run the factory as it was suffering losses of Rs 7 crore per month and net worth had turned negative suffering losses for the last 15 years. HM, which began making the Ambassador in 1948, modelling it after the British Morris Oxford III, sold 2,214 units of the vehicle last year, a steep decline from around 24,000 units a year in the 1980s.

Though most Ambassador sales go to taxi services and government departments, “there has been a reduction in demand for the Ambassador,” the company, which had been scouting for investors for fund infusion, said.

Earlier this year HM transferred another car plant based in the south-coast city of Chennai to its financial arm, Hindustan Motor Finance Corporation Ltd.

Earlier, promoter and chairman of the company C K Birla had resigned, and later CEO and MD Uttam Bose had stepped down.  Shares of HM sank 10 per cent Monday.

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