It's official, Bajaj to shut down Akurdi plant

Close on the heels of Bajaj Auto's announcement of a four-day week at its Akurdi plant in Pune that led to speculation over its closure, the company today said it will close down the plant with effect from September 1, 2007.

Rajeev Bajaj, managing director, Bajaj Auto said, "The plant closure is necessitated not due to any failure on the part of the workmen or the management, but largely due to the impact of government policies on capacity rationalisation, chiefly the regional distortions created by inconsistent tax benefits, and octroi in the state."

The company had declared a four-day week at the plant beginning last Friday, though there was no mention of the duration of the changed schedule. With the production at the plant declining very sharply over the last two years, there was speculation over whether the plant would ever resume normally as the company has created and planned large capacities in Pant Nagar in Uttarakhand and Chakan near Pune.

The workers' unions at Akurdi had planned agitations as they saw the four-day week as a ploy to ultimately shut down the plant rendering them jobless. Today's communication says the workers will receive full wages for five days of the week and 50% of wages for the sixth day, as provided in the last signed wage agreement.