Bajaj may shift production to other plants

Bajaj Auto could move production of its popular Pulsar motorcycles out of its Chakan plant, near Pune, if labour issues there do not get resolved in the next couple of weeks.

Production at the facility has plunged dramatically in the past two days because of a strike over unmet demands of a section of the 1,500-strong workforce.

The Chakan plant, which had been producing 3,000 bikes a day for the past few months, manufactured only 600 units yesterday, as only a small number of its workers reported to duty.

Confirming that the company could shift its production to other facilities, Bajaj Auto Managing Director Rajiv Bajaj told Business Standard: “If we take a view that this (labour issue) is going to extend over the next two months, we certainly can do that, and will do that.”

Bajaj Auto’s most technologically-advanced facility, Chakan has a manufacturing capacity of 1.2 million motorcycles a year and produces the high-margin Pulsar, besides the Avenger, KTM, and Kawasaki range of bikes.

In fact, the Pune-based auto firm has already started production of Pulsar bikes at its Aurangabad facility, which also makes three-wheelers. About 100 units of the Pulsar were produced at Aurangabad yesterday, the MD said.

“When you buy 80 per cent (of parts) from suppliers, they can supply that to any plant. The rest of welding, painting and assembling, too, can be done at another plant. But I would do that only after waiting for a couple of weeks. (If) we think the situation is going to drag on for a few months, we obviously would do that,” he added.

For now, production of the KTM models, such as the Duke 125 (export model), the Duke 200 and the Duke 390, will continue to be from Chakan. With the KTM models, Bajaj Auto is giving priority to the export market.

“We can do it at Aurangabad, Pantnagar or both, because the same set of vendors supply to both facilities. In fact, we have started producing a small number of Pulsars at Aurangabad. So, when 600 Pulsars were produced at Chakan yesterday, about 100 were made at Aurangabad.... we are just preparing for any eventuality that might arise,” Bajaj further said.

Only 200 of the 1,500 workers reported to duty yesterday, while 100 had worked the day before. The union, the Vishwa Kalyan Kamgar Sanghatana, led by Dilip Pawar and representing Bajaj’s Akurdi plant, has now made some demands to the management of the Chakan plant. These include reinstatement of 13 suspended workers, allotment of equity shares to 1,500 workers at discounted rates and wage renegotiations.

Bajaj has clarified that a new wage agreement, in force since 2010, promises workers an annual increment of 12 per cent, except in serious crises. This agreement extends till 2019. “We will not respond if someone now wants a 25 per cent increase in wages (Pawar has demanded). We can only respond to bonafide grievances and we will surely look into those,” Rajiv Bajaj said.

The union has demanded that the workers be given the option of buying 500 equity shares at Rs 1 apiece. This would mean a bonanza of Rs 9 lakh for each worker. The company has never offered the employee stock option plan  to any of its staff members, including the management.

Plant: Chakan
Capacity: 4,000 units/day
Utilisation: 3,000 units/day (only 600 produced yesterday)
Models: 5 models of Pulsar, 3 models of KTM, 2 models of Kawasaki, and Avenger