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Maruti to offer third exit scheme this month

New Delhi, Nov. 4 (PTI): Maruti Udyog today said 269 employees had opted for its second voluntary retirement scheme (VRS) that closed last month. Another early-retirement planned this month will cut costs further.

“The people who have opted for the second scheme are all non-unionised workers. We will introduce another scheme for the unionised workers this month,” company managing director Jagdish Khattar said.

He did not reveal the number of workers targeted through the new scheme.

Maruti, which is 54.2 per cent owned by Japan's Suzuki Motor Corp, had paid out Rs 29.4 crore to employees towards its second VRS, which ended on October 18.

The size of the workforce has been reduced to about 4,500 people, Khattar said, but declined to divulge the total number of unionised and non-unionised workers.

Maruti had offered its maiden VRS in October 2001. About 1,050 employees or 19 per cent of the workforce had opted for the scheme, bringing down the number of employees to 4,596.

The early retirement schemes are part of the company’s efforts to contain rising cost pressure due to increasing steel prices and an appreciating yen by improving production and rationalising costs.

Maruti chairman S Nakanishi had recently said the strategy would be to cut costs by 30 per cent over a three-year period ending 2005, for which every operation was being reviewed.

The company has also undertaken a major revamp of its vendor base and reduced it to less than 350 at present from 400 a couple of years back.

Maruti has also started an aluminium foundry at Manesar in Haryana in joint venture with Suzuki, which is expected to help it save Rs 60-70 crore annually.

The aluminium foundry, established with an investment of Rs 115 crore, produces mostly engine parts and the entire production will substitute imports for the carmaker. For the first six months of the current financial year ended September 30, Maruti's net profit soared 467 per cent to Rs 244.2 crore.

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