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Escorts Yamaha to cut jobs to stay trim

Byas Anand in New Delhi

In a bid to contain costs and improve productivity, Escorts Yamaha Motors Limited has decided to reduce its workforce by 200 during the current financial year.

This would be over and above several casual workers that the company intends to withdraw, Escorts Yamaha Joint Managing Director Nikhil Nanda said today. ''We eventually want to withdraw the entire casual workforce over a period of time. Over the last two months, around 420 casuals have been withdrawn.''

This is part of the company's decision to keep operational costs under control. The trimming exercise would also include a voluntary retirement scheme.

''A lot of employees have already opted for VRS in the past three years and we expect this to go on. We have embarked on a restructuring exercise which has led to 30 per cent increase in productivity,'' Nanda said.

In addition, EYML has also decided to convert a chunk of its casual labour force into permanent workers in a phased manner. This is part of the wage settlement agreement reached by the EYML management with its employees on Tuesday after protracted negotiations.

As per the new settlement, a direct workman in the company would now get a total benefit of almost Rs 6,500 per month. However, certain incentives, which were earlier being offered to the employees, have now been discontinued.

This settlement comes close on the heels of, and is in several ways similar to, the recent agreement signed by Escorts Limited management and its employees.

All the 18 Escorts group companies had been in the thick of industrial unrest since November 23.

While the strike was withdrawn in all the Escorts group companies after 40 days, the unrest continued at EYML's Surajpur plant for 70 days. The company had lost close to Rs 2 billion due to a tool-down strike.

The company, Nanda said, had embarked upon a Rs 4.5 billion expansion programme under which the existing capacities would be enhanced and new vehicles introduced every year. Of this, around Rs 3.50 billion had already been spent.

The company plans to increase the current production capacity from 232,000 to 500,000 bikes per annum, over a three-year period.

Escorts Yamaha had recently unveiled its latest four-stroke model -- Yamaha YBX-125 -- and another new model would be unveiled shortly.

Regarding the funding of the expansion programme, Nanda said the company had already achieved financial closure for the expansion programme and so had decided not to launch a public issue, as initially planned.

The Foreign Investment Promotion Board had recently granted a go-ahead to the Yamaha Motor Company for infusing Rs 300 million, by way of redeemable preference shares, into Escorts Yamaha. However, this had not resulted in any alteration in the equity holdings of the two partners. Presently, both Escorts and Yamaha control 50 per cent stake each in the venture.

UNI

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