The Telegraph
Since 1st March, 1999
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Limping Bata tries to walk on ‘send-off’ crutch

Calcutta, May 5: Shoe-major Bata India Limited (BIL) has slashed its production by 60 per cent and introduced a ‘send-off’’ scheme for its 4,000-odd employees at the Batanagar factory.

Following the decision to cut its production, the factory is producing 10,000 pairs of shoes daily. Earlier, it sewed up 24,000 pairs.

The reason behind the output cut is the large stocks piled up at the factory.

Sources say the company’s marketing strategy has failed to address the issue of fierce competition from regional players.

To cope with the slump, the company has introduced a ‘send-off’ scheme under which employees will report to the factory but not work. They will be given basic salaries and dearness allowance in a system that will stop incentives.

Asked about the company’s move to slash production, director (finance) P. K. Nag said in a faxed reply, “The management is focussed on loading the captive production facilities at an optimum level. It is a continuous exercise to align production with sales performance to ensure that there is no blockade of idle capital. In order to avoid the situation of under-loading in factories, the management comes up with new designs and styles depending upon the market trend.”

Though Nag denied that a send-off scheme was in play, he admitted that a section of the employees may be rendered “idle” from time to time, depending on the production requirement in various product categories.

Nilratan Kanjilal, general secretary of Bata Mazdoor Union, said: “Incentives form a major part of a worker’s pay packet. The send-off scheme has severely affected workers. The company should increase sales where it has failed. The marketing strategy has come unstuck. There is enough room to improve in these areas.”

The company’s move to outsource products to meet the customer’s needs has not yielded results. Employees have also raised questions about the officials who have been appointed in key positions.

Bata India, in a move to re-align its business with global trends, had restructured its top team. Last year, the board decided to appoint C. Morzaria, the former managing director of the company, as executive vice-chairman and Stephen John Davies as the new managing director. Davies replaced Fernando Garcia who joined the parent company Bata Shoe Organisation.

Meanwhile, the company, which has stopped fresh recruitment after March 30, 2000, has sunk deeper into the red.

The company has suffered a 55.68 per cent rise in net loss in the first quarter ended March 31, 2003, to Rs 6.57 crore as against Rs 4.22 crore in the corresponding previous period.

However, sales rose marginally by 6.61 per cent to Rs 153.35 crore compared with Rs 143.83 crore in the corresponding previous period.

The company’s expenditure increased to Rs 154.94 crore against Rs 146.33 crore in the first quarter of 2002.

Bata had blamed industrial action by unions in March 2003 and apprehensions regarding negative impact of value-added tax for its dismal performance. “We have strongly opposed the company’s move to put the entire blame on us for the drop in sales in March,” Kanjilal said.

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