MUMBAI, Feb 5: Labour holds the key to resolving the crisis at PAL-Peugeot's Kalyan plant. The sprawling facility is up for ownership following Automobiles Peugeot's decision to pull out from the venture.While the plant has everything in place, right from an assembly line to ®paint shop, interested parties have apparently been apprehensive due to the legacy of labour trouble at the plant. Mahindra & Mahindra, according to recent reports, has had a look at the facility but is thinking twice on the labour issue. Observers say unless a complete retrenchment is assured, it would not be inclined to consider the offer.
By all standards, the PAL-Peugeot plant is the best bet to any automaker who needs a ready facility. M&M, for instance, has been planning a new utility vehicle -- Project Scorpio -- and would actually benefit moving into Kalyan instead of locating a new site.
Yet, insist observers, the latter seems a more pragmatic option rather than take a chance with the present workforce. The new projectwould call for a brand new work culture and with its history of lockouts and strifes, the Kalyan facility does not offer peace.
The latest was the five-month lockout in 1995 which hit Peugeot 309 production, while other models like the Astra, Cielo and Escort surged ahead in the mid-size segment. Eventually, after the lockout was lifted in November 1995, a new union was established in the plant and there has been no strike, thereafter. In fact, sources familiar with PAL-Peugeot reiterate that there has been a "sea change" in the workers' attitude and productivity has improved by leaps and bounds.
"The pity is that the workers have been denied an opportunity to display their skills what with all the problems that have plagued the plant in 1996," they added. The unfortunate aspect was that even after the strike, there were problems like depleting supply of CKD (completely knocked down) kits and a financial crisis. Despite these drawbacks, morale continued to be high and, reportedly, every effort was made byworkers to keep production at reasonable levels.
There have also been unconfirmed reports that a voluntary retirement scheme (VRS) is also in place which will see some flab being trimmmed. The balance constitutes skilled people who "are at par with the best in Indian industry."
Whether this is enough comfort to the prospective buyer remains to be seen because there seems to be no change in opinion on the labour issue. On the other hand, a total retrenchment may not be an easy task. The choice will have to boil down between survival of the plant and ensuring job continuity. Sources, however, feel that the present workforce would be only too willing to comply with a new set of rules.
Meanwhile, production at the plant is being confined to the Viceroy (formerly 118NE) and its diesel version, the 1.38D. There has been a complete halt in asssembly of the 309 (both petrol and diesel) and sources indicate that infusion of a few crores of rupees will at least ensure continuation of work for the Viceroy and1.38D.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
