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CHENNAI, Oct. 1

THE decks have been cleared for the Dunlop factory at Ambattur, near here, to be reopened following an agreement signed between the management and the workers' union. The agreement between Dunlop India Ltd and the Dunlop Factory Employees Union was signed here today.

Sources told Business Line that the factory was expected to resume operations on November 18 before which a voluntary retirement scheme (VRS) is to be implemented. The agreement provides for cutting down the workforce by 509 through VRS to be announced later this month, which will bring down the work force to 1,207; a 20 per cent cut in wages and a three year wage freeze; a resumption payment of Rs 3,500 per worker, which will be deducted from the first instalment of the back wages that are to be paid in six annual instalments; and provision has been made for lay-off compensation.

Earlier, sources had said that the Ambattur facility would produce tyres under the Falcon brand, a Karnataka-based company belonging to the group. The company is also looking to the State Government, which mediated in the settlement, for relief and concessions.

According to a press release from the company, the settlement involves alignment of costs to industry standards and increased productivity, payment of back wages in a phased manner without affecting working capital requirement, offer of a voluntary retirement scheme and contracting out of non-value added functions.

The company is in discussion with the unions at Sahagunj, West Bengal, to arrive at a similar settlement. The move to reopen the facility in Tamil Nadu was expected to catalyse the reopening of the Sahagunj factory and the finalisation of the rehabilitation scheme, the release said.

The company, which had shut down operations in February 1998, came under the purview of the Board for Industrial and Financial Reconstruction in June 1998. Subsequently, holding operations commenced in Ambattur and Sahagunj in 2000; but the company again suspended operations in April 2001 to contain the losses. During the holding operations, the company made a turnover of Rs 100 crore and paid out Rs 52 crore as wages to the workers, the release said.

The management planned to bring in advanced technology and had approached consultants to make the manufacturing process more contemporary and cost-efficient, the release said.

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