Govt ‘unhappy’ with Dunlop stand, no loan cushion for factory

Kolkata, 26 Nov., 2008 : The situation at Dunlop India took a new turn when it emerged that the company may not receive Rs 100 crore loan, which it has asked from the West Bengal Industrial Development Corporation (WBIDC) to resume production at its Sahagunj factory.

“No state government provides working capital to any factory. Merely because you could not get it from banks, you cannot rush to the government. If we give money to Dunlop, then other companies facing financial crunch will also approach us,” a highly-placed source at the Writers’ Buildings told The newspersons.

Labour Minister Mrinal Banerjee tried to organise a tripartite meeting between the management, trade unions and the state government on Tuesday. But with Dunlop chairman Pawan Ruia taking an unflinching stand on suspending the production, the meeting failed to take off.

“We told Ruia to modify the draft he gave us, where he used the phrase ‘suspension of production’ at Dunlop. He refused to change the words and hence the meeting could not take place,” said Banerjee.

According to labour department officials, the government can intervene only in cases such as lock-out, lay-off, suspension of work and retrenchment of work. But since Ruia stuck to the phrase ‘suspension of production’, the government washed its hands of Dunlop.

Government officials also said Ruia refused to budge from his demand that trade unions sign the agreement accepting Rs 2,000 as subsistence allowance for each worker.

On Tuesday, the Dunlop chief also met Subesh Das, Principal Secretary to the chief minister, and gave him a letter requesting for the loan of Rs 100 crore and sales tax exemption. “We have given the letter to the CM’s secretary. We had to suspend the production because of lack of working capital,” said Ruia.

Representatives of two trade unions owing allegiance to Centre of Indian Trade Unions and Indian National Trade Union Congress met the labour minister and demanded that the government bring Dunlop to the negotiating table.

“Ruia has lost his credibility. If he cannot mobilise Rs 70 crore to run the factory, why did he take up the unit,” Pramatesh Sen, state general secretary of INTUC, said.

Througout the day, the union leaders kept waiting at the Writers’ Buildings for a tripartite meeting. Finally in the evening they were told to go home.