Ruia at the film festival party on Saturday

Calcutta, Nov. 17: Dunlop has suspended production at its Sahaganj tyre plant and offered a monthly grant of Rs 2,000 to its employees but the decision has run into opposition.

Unions that initially agreed to the deal have backtracked under pressure from workers who are thinking of approaching Mamata Banerjee.

If the standoff continues and the company opts for closure or suspension of work, the 1,200 workers may have to go without any pay, union leaders said. The Rs 2,000 offered works out to a third of the employee’s monthly pay.

“Economic reasons”, including the credit crunch stifling global economies, have been cited for halting production, three years after Pawan K. Ruia took over the ailing firm.

The company had sounded out union leaders on stopping production till it arranged a Rs 100-crore loan from banks.

“There were two options. We could have issued an order for suspension of work and not paid anything. But we decided not to do so and pay this amount,” said Ruia, the chairman of Dunlop India.

“After the global financial turmoil, getting funds was difficult. The situation has improved now. I am confident of re-opening the plant with expanded capacity soon,” added Ruia, who broke into Calcutta’s social circuit by throwing the film festival farewell party in 2006. This year, he hosted one of the film festival parties on Saturday.

Some workers saw a parallel with Jet — which sacked employees and reinstated them, attracting allegations of pressuring the government for relief — but Dunlop officials debunked the suggestion. “None of the people has been laid off…. All the workmen on the rolls as on date continue to remain in employment,” a Dunlop statement said.

Sources said the management might consider extending the cut to the 175-odd managers.

The sources said the management had been holding talks with unions for two weeks and a consensus was reached on Saturday. But a section of the workers, apparently egged on by Trinamul Congress sympathisers, opposed the deal.

Nearly 500 workers in Sahagunj gheraoed leaders of Citu and Intuc for about three hours till 2pm. Later, they gheraoed the personnel manager and blocked a road.

Although Intuc is officially affiliated to the Congress, it has several sympathisers of the Trinamul Congress which does not have a union in the Dunlop factory.

“There has been no production at the factory for the past five months. We have received half our salary in September and are yet to get our October pay,” said Ananta Roy, a worker in the off-the-road section.

Dipankar Roy, the general secretary of Citu-led Dunlop Workers’ Union, said: “We held a meeting with Intuc and decided to agree to the terms of the management to avoid closure of the factory. Now that the workers are objecting, we will not sign any agreement. But the agitating workers will have to take the responsibility of preventing closure or suspension of work.”