West Bengal

Driven to despair

Print edition : June 27, 2014

On the Vidyasagar Setu in Kolkata. Photo: RUPAK DE CHOWDHURI/REUTERS

Outside Hindustan Motors' plant at Uttarpara near Kolkata, employees protest against the decision to stop production of the Ambassador car. Photo: RUPAK DE CHOWDHURI/REUTERS

A PALL of uncertainty looms over the future of the iconic Ambassador car and the 2,600 workers involved in its production at Hindustan Motors after the company suspended production at its factory in Uttarpara in West Bengal on May 24.

The company, which is a part of the C.K. Birla Group, has been ailing for a long time. Toiling under acute shortage of funds and dwindling demand for the car, the Uttarpara plant’s accumulated liability stood at Rs.94 crore. According to the work suspension notice, the unit incurred cash losses of around Rs.7 crore every month, and was able to recover less than 20 per cent of the monthly fixed cost. The company has not paid the employees of the plant for the past six months.

“We got last November’s salary only in March this year. All of us here are at our wit’s end now. We have children who have cleared the Board exams this year, but cannot get into any school because we cannot pay the admission fees,” a worker of the plant told Frontline.

Their plight is further worsened by the reaction of the local people. “The shops from where we have been buying things for more than one generation have stopped giving us credit because they fear we will not be able to repay them. Those of us who live in rented places are being forced by landlords to vacate their premises. This is just the beginning of our problems. We do not see any sign of the State government trying to intervene on our behalf. Do not be surprised if people start committing suicide,” said a long-time employee of the plant.

Industry experts feel this may well be the end of the road for the Ambassador, the car which has dominated the streets of Kolkata for more than 50 years. The Uttarpara plant, set up in 1942, is also one of the oldest automobile factories in Asia. The Ambassador, which was modelled on the British Morris Oxford series, hit the Indian streets in 1958 and remained the undisputed king of the road until the downward trend for the company began in the mid-1990s. By 2009, production of cars had dropped from 24,000 per year in the mid-1980s to just a little over 5,500. Many feel it was the Ambassador’s failure to keep up with the times and to accept technological obsolescence that finally led to its downfall.

Recently Hindustan Motors hived off its plant in Chennai for a reported Rs.150 crore, which, the company claimed, was used to pay off some of its accumulated liabilities. In February, the company was referred to the Board for Industrial and Financial Reconstruction (BIFR).

Suhrid Sankar Chattopadhyay