The Telegraph
Friday , May 30 , 2014
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HM erects Chinese wall to shield future strategy

Bengal labour minister Purnendu Bose (left) with Hind Motors CEO Moloy Chowdhury (second from right) and labour secretary Amal Roy Chowdhury (right) in Calcutta on Thursday. A Telegraph picture

Calcutta, May 29: The veil over the mystery Chinese buyer for Hindustan Motors’ Uttarpara plant in Bengal refuses to rise days after rumours about such a possibility bubbled into a speculative froth.

The company refused to reply to a pointed question on the identity of the Chinese buyer or buyers and the nature and stage of such talks.

Bengal labour minister Purnendu Bose today said the company officials had “vaguely” told him that HM was in talks with some Chinese players but they did not reveal the names.

“We have been told that the company is holding discussions with two or three Chinese companies for a possible tie-up. But there is nothing in detail,” the minister said after a bipartite meeting between the HM management and the Bengal government. Bose had asked the company to revert with a concrete plan on Tuesday.

Last week, HM had ordered an indefinite work suspension citing operational reasons that made the plant’s functioning unviable.

To a query from The Telegraph, the company spokesperson said, “Our efforts to find strategic investors have not materialised as yet but deliberations continue.”

Sources said the company had initiated dialogues with several global auto makers over a decade but none of them moved beyond boardroom presentations.

In a statement today, HM said its current productivity at one car per worker per year against an industry norm of 365 cars per worker per year made operations “unviable”.

“The company is left with no disposable assets or investments which can be utilised to fund cash losses incurred out of operations at the Uttarpara plant,” the statement added.

Hinting at a possible downsizing exercise, the company said it had “requested for a suitable time frame within which it can restructure the organisation and reduce its liabilities before deciding on next steps”.

Bose said the government was not willing to listen to any case for downsizing.

“These are baseless excuses. The management should first do a few things right and then attempt talking about productivity,” Bose said.

The minister said the issue had also been discussed with finance and industries minister Amit Mitra and the latter’s departments could be brought on board.

Payment to workers

Bose said the company had promised to make a “partial advance payment” by Monday to around 2,600 employees of the plant against their wage arrears, which have run up to Rs 11.9 crore. The management had paid the wages of November 2013 in March this year.

The 90-minute meeting was held today in Bose’s chamber at Writers’ Buildings after the company refused to attend a tripartite meeting convened on Tuesday by Hooghly’s deputy labour commissioner Amal Mazumdar.

Bose, labour commissioner Jawaid Akhtar and labour secretary Amal Roy Chowdhury told the company’s chief executive officer Moloy Chowdhury and head of corporate human resources Ashim Basu that the “core” areas that needed to be addressed were suspension of work and the payment of arrears.

HM also said it would “release advance wages” within the “next 3-4 days” to resolve the situation.

Bose later met chief minister Mamata Banerjee at Nabanna to apprise her of the situation.

Though Bose remained mum, a source said the minister told Mamata that his powers were limited as this wasn’t a case of labour unrest.

“He told her that he had warned the management of legal consequences if labour rights were violated, but there isn’t much he could do unless Amit Mitra intervened,” the source said.