NEW DELHI, AUG 31: The troubled Steel Authority of India Ltd (SAIL) is now facing resistance to the McKinsey-proposed restructuring plan from a new quarters - its Central Marketing Organisation - the unit in charge of all-India marketing of SAIL products.The McKinsey report, which broadly talks about restructuring SAIL by hiving off non-core areas and overhauling its marketing skills, had already been rejected by the Steel Executives Federation of India (SEFI) earlier. Now, with the CMO also flexing its muscle mainly on account of the contention that since its job is marketing it doesn't need lessons from McKinsey, the restructuring of the organisation seems to have hit a bumpy road.In an internal note to all the marketing executives of SAIL by the CMO, a sample of recommendation of McKinsey has been mentioned which states: ``We can earn Rs 580 crore by way of increasing our market share from 11 per cent to 32 per cent in cold reducers segment, by improving quality etc. We can earn Rs 355 crore by way of changing procedures of purchase. We have scope to reduce our cost by another Rs 1,000 crore''.Pooh-poohing these recommendations, the CMO note has stated that ``all these suggestions are supposed to be our objectives'' and asked ``do they amount to any value addition by the Consultant?'' Referring to a hidden agenda the note has stated that ``in each of these cases we would be required to hire them time and again so that they can give so-called concrete suggestions to achieve the above types of savings. So by now you must have understood the full import of their suggestions''.The note has also hit out at the top management of SAIL over its handling of the marketing outfit. The note has charged the management that for them marketing of steel is like selling `old newspapers' and not appreciating the intricacies and skills of marketing. The note has come down heavily on political and bureaucratic interference in the CMO which leads to filling the organisation with more and more executives on conditions other than merit.``We know that one suggestion of McKinsey is to close Alloy Steel Plant. Are we preparing for speedier closure of SAIL itself? Some actions have already been initiated, like sale of slabs by Bokaro Steel Plant at very low prices in spite of reservations from majority of directors and it is continuing. Why? We know this will affect prices of plates as well as wire rods? Why are we continuing with these decisions? We are talking of removing inter-branch competition, who will remove inter-unit competition?'' the note has asked.The crux of the CMO's grievance against McKinsey is that the latter does not possess specialised knowledge about steel whereas the former does. Therefore, there should be more reliance on the CMO rather then McKinsey for turning around Sail. Secondly, they contend that apart from recommending privatisation, McKinsey has not been able to come up with any other suggestion which can be considered as an add-on to what the CMO is already aware of.
