Hind Motor looks to monetise land as workers refuse to accept VRS

At present, the company has around 1,300 workers on its payroll.

Hindustan Motors, the makers of the famous Ambassador cars, is mulling over monetising land available with its Uttarpara plant. This would eliminate any possibility of the reopening of the factory.

“This is prime land and the management feels the best way to get something out of this facility is to monetise it,” said a senior official of the company. According to him, the issue has been discussed at the board level.

While resuming production of Ambassador, the company’s flagship vehicle, had already been ruled out, the company had said  it was trying to revive operations at the plant. It was learnt to be in talks with a few companies in the automobile component manufacturing space.

“The management made several attempts to revive the situation, but nothing materialised. While the business of Ambassador cars was no more a viable option, the attempts at getting partners have also bore no fruits,” said the official. The company had announced a voluntary retirement scheme package for its remaining workers last week.

This is the second VRS from the company after only 899 employees opted for the first severance package.

At present, the company has around 1,300 workers on its payroll.

A lump sum of Rs 100,000 has been offered under the package, besides statutory payments such as provident fund and gratuity.

Sources from the union say not many would opt for the VRS, as it was not attractive.

“VRS should be calculated based on the remaining years of service.

"Here, it is an arbitrary decision, so many have decided not to accept it,” said Shantashree Chatterjee, leader of the CITU-backed union at the plant. He alleged that the company was repeatedly offering VRS to the employees so as to unlock the land for selling it.

When contacted, a company spokesperson didn't respond to the specific query of monetising the land, but said: “Hindustan Motors Limited came out with another scheme on repeated requests of its employees.

"The company, in spite of severe financial crisis and earning no revenue for past 16 months, has considered the requests of employees and this manifests its bona-fide intention and commitment towards employee welfare.”

“Electric and water connection to our quarters have been discontinued, forcing many people to leave.

"If we opt for the VRS, we will be thrown out instantly and the package is not even attractive,” said Ratan Chandra Sapuy, who has worked at the plant for 15 years.

This would be the second time when Hindustan Motors would be selling land at the Uttarpara facility.

In 2006, Hindustan Motors got an approval from the erstwhile Left Front government to sell 314 acres of excess land to Bengal Shriram Hitech City, a part of the property development arm of the Chennai-based Shriram Group.

Hindustan Motors had informed of projected revenue of Rs 85 crore (Rs 850 million) from the sale of excess land. However, the deal ran into trouble after an internal audit of the state government as well as the state vigilance inquiry found that Hindustan Motors had sold the land at a price of Rs 285 crore (Rs 2.85 billion).

However, the company denied the allegations, saying the money went to ‘deficit financing’ of the Uttarpara plant.

The issue has since then been settled, as the company, after prolonged discussions, agreed to pay the outstanding amount of Rs 194 crore (Rs 1.94 billion) to the state government.

Image: The closed factory of Uttarapara plant. Photograph: Dipak Chakraborty/Rediff.com