Scooters India workers write to Sonia against sell-off
23 May 2011The 1,500-odd employees of Scooters India Ltd (SIL) have sought the intervention of Congress president and United Progressive Alliance chairperson Sonia Gandhi to prevent the proposed sale of the bankrupt state-owned company (See: Government to divest entire stake in Scooters India).
The union cabinet last week cleared a proposal to sell the entire 95.38 government stake in SIL. The resolution is likely to come up before Parliament in the monsoon session, and the government reportedly expects to complete the sale within this fiscal.
The government is likely to call for global bids for the company, says CNBC-TV18. Malaysia's Tuk Tuk, Atul Auto, Mahindra & Mahindra, and Italy's Piaggio may be interested in bidding for the company, which currently only manufactures three-wheelers.
The SIL joint action committee on Saturday submitted a memorandum to Sonia Gandhi. It has also sought a meeting with heavy industries minister Praful Patel to plead against divestment, according to co-convener of the committee O P Pandey.
The employees allege that ''vested interests'' had caused the systematic and gradual downfall of the public sector enterprise.
A few years back, the company was estimated to be worth Rs850 crore. However, its net worth was completely eroded by 2008-09.
The factory is spread over 150 acres of land, while another 200 acres comprise residential blocks and abandoned open stretches. The leased land belongs to the Uttar Pradesh government.
The employees are also seeking an audience with Uttar Pradesh's ruling Bahujan Samaj Party general secretary Satish Chandra Mishra and other political parties, including the state Congress leadership, in this regard.
Almost 1,000 employees are on SIL's regular rolls, while another 500-odd had been retained after retirement. ''Except for the directors, all the other company officials and employees are supporting the agitation,'' Pandey said.
SIL's net loss decreased to Rs17 crore during 2010-11, down from Rs28 crore during 2009-10. Interestingly, SIL posted operational profit of Rs1.5 crore in the fourth quarter of the last financial year.
Last year, Rajkot-based Atul Auto had formally expressed its interest to buy a controlling stake in the company and even met then heavy industries minister Vilasrao Deshmukh.
Earlier, the ailing company had made several attempts to foray into new segments, such as electric two-wheelers, for reviving its fortunes. Its current product line centres on the three-wheeler 'Vikram', a cost-effective multi-passenger vehicle widely used for public transport.
Incorporated in 1972, Lucknow-based SIL took over the plant from Innocenti of Italy, from which it bought the plant and machinery, design and copyright. In 1975, SIL started its commercial production of scooters under the brand name of Vijay Super for the domestic market and Lambretta for the overseas market.
Later, it introduced the 'Vikram', which ran on fossil fuel such as petrol and diesel and non-conventional fuels like gas and batteries. The company has a network of regional sales offices all over India.
In 1996, SIL was referred to the Board for Industrial and Financial Reconstruction (BIFR). It discontinued two-wheeler production in 1997.
After the BIFR approved a revival plan in 1996, SIL witnessed a turnaround and started making a profit. It posted profits till 2003, but thereafter again slipped into the red.