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Press reports
emanating from India suggest Fiat Auto India is planning to
shut its factory at Kurla and transfer entire production
to the company’s other manufacturing facility, located at Ranjangaon, near Pune. The news comes just days after the
joint Fiat-Tata Motors dealer network was inaugurated.
Fiat is set to shut its Kurla factory and transfer entire
production to Ranjangaon - report from The Economic Times
Fiat India has offered a VRS (voluntary retirement scheme)
to some of its employees at its manufacturing facility. More
than 1,100 daily workers have opted for the VRS. After
concluding the VRS by the middle of this month, Fiat India
is planning to shut shop in Kurla and transfer its entire
production to the company’s greenfield manufacturing
facility at Ranjangaon, near Pune, sources said. Fiat
officials were unavailable for comment.
Sources indicate that the sale of Kurla plant and the
surrounding area could fetch around Rs 500-600 crore.
Company officials refused to quote the number of people they
were targeting for VRS or the outgo of funds under the
scheme. However, sources said that each worker is tipped to
receive around Rs 15-16 lakh. Industry analysts attribute
the decision to reduce manpower to the dwindling sales
volumes of Fiat India. The company, which manufactures Palio,
Siena and the recently-launched Palio Adventure, now has
1,300 workers.
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Fiat Auto India, which manufactures Palio, Siena and
the recently-launched Palio Adventure model locally,
now employs 1,300 workers. |
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Press reports emanating from India suggest Fiat Auto
India is planning to shut its factory at Kurla and
transfer its entire production to the company’s
other manufacturing facility, located at Ranjangaon,
near Pune. |
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In October 1998, Fiat had reduced its
workforce by 1,050 through a similar VRS. Company officials
said that Fiat has surplus staff, hence the fresh VRS.
The company is now hoping that the Tata-Fiat alliance works
out. Italian carmaker Fiat has roped in India’s Tata Motors
to salvage its dwindling sales in what is being considered
as one of the world’s fastest growing automobile markets.
The deal begins this month, when Tata Motors starts managing
the marketing and distribution of Fiat’s cars in India.
Sources have said the move is a precursor to wider
collaboration aimed at foraying into product development,
manufacturing and sourcing. At first, Fiat will use Tata
Motors’ significant dealer network presence. Fiat, it may be
recalled, had identified bad service and lack of spare parts
as key reasons for its dismal performance in India. Sources
say that performance could turn around with the entry of
Tata Motors on to the stage.
report courtesy
of
The Economic Times
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