NEW DELHI, February 5: The Maruti crisis showed signs of blowing over with the government and the Suzuki Motor Corporation finally reaching an agreement in the board meeting held on Thursday on the two contentious issues regarding transfer of technology and royalty payment.While Suzuki submitted a project report on the transfer of the critical gear-box technology, which would now be evaluated by the Maruti management, the government softened its stand on the royalty payment issue. The Maruti board will now forward the royalty payments proposal to the secretariat of industrial approvals for its continuation.
It is understood that a decision on the transfer of gear box technology will be taken in the next two to three months as the total cost involved and its feasibility has to be evaluated by the management. Sources said that the cost of transferring technology would be over Rs 500 crore, though it is not known as yet whether it would be feasible for the company. Though the cost of transfer was indicatedat the board meeting, company officials refused to give any details. Suzuki also indicated in the meeting the plan of bringing in technology by the year 2000, sources said.
Sources said the major issue of payment of royalties on three Maruti models - 800 cc, Omni and Gypsy - were reviewed on Thursday. The board decided that it should be cleared for the next three years. The seven-year long agreement was to be reviewed after four years of it being signed, that is in 1997. Speaking to mediapersons after the meeting, the company's chairman Probir Sengupta said: "Some technology has already been transferred, while some will continue to flow in".
The agreement on payment of royalties signed in 1994 had been cleared for four years, after which it was to be reviewed in 1997. The issue was taken up on Thursday's board meeting and cleared for the next three years, subject to SIA approval.
The transfer will also include technology for fuel-efficiency, emission standards to meet the year 2000 norms and researchand development, he said. The Maruti board also discussed in detail the corporate plan which includes the company strategy for the market, human resources development and research and development plan. "Some work has been done on this, and now the management will discuss this further and arrive at a decision".
The Maruti Employees Union also sought clarifications from the board on labour wages.
The revision of wages was cleared by the board on Saturday's board meeting, but the agreement was not signed as some queries were raised by employees. Sources said that the pact is expected to be signed in the next few days.
The board meeting was attended by the four government nominees, including the chairman, managing director RSSLN Bhaskarudu, and director - Anoop Mukherji. SMC was represented by two directors K Senga and T Kobayashi. K Kumar and Jagdish Khattar were special invitees to the meeting.
With the second board meeting in less than a week, the two equal partners in the Rs 8,000-crore carjoint-venture seem to have kept the contentious issue of managing director's appointment on the backburner to prepare Maruti for the coming competition. Payment of royalty to Suzuki, estimated at Rs 30 crore for 1997-98, for its technology in various models of Maruti have been put on hold since April 1, 1997, when the existing agreement expired.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
