Caterpillar India downsizes management cadre

Earthmoving equipment manufacturer Caterpillar India Pvt Ltd, a subsidiary of Caterpillar Inc. USA has laid off three of its senior managers leading to widespread apprehension among other staff that this might just be the beginning of a major downsizing exercise.

Caterpillar Inc. had bought Hindustan Motors Ltd.'s profitable earthmoving equipment division for Rs. 337 crore comprising two plants located at Tiruvallur, near Chennai and at Pondicherry.

The management is facing pressure from the workers to effect a wage hike with the workers' union demanding a flat raise of Rs. 4,200 per month for each employees. But according to the workers' union leader Mr. R.Kuchelar, the management is ready to make only a one-time adhoc payment of Rs 30,000. Caterpillar India is citing the Rs. 40 crore loss to refuse consideration of any wage hike.

As a pressure tactics, the workers boycotted the factory canteen food for nearly a month. One rumour doing rounds among the employees is that the management was contemplating laying off at least 140 workers to make the company viable.

Caterpillar India has posted a loss of Rs. 20 crore last fiscal and a matching sum is apprehended to have been incurred this year. With no major orders coming in, the Tiruvallur factory's monthly sales have come down to around 10 vehicles. The only revenue earned seems to be from the sale of spare parts.

In an effort to shore up revenue and create a premier brand image, Caterpillar India has jacked up the prices across all its models by Rs. 2-3 lakh even at the cost of some orders getting cancelled.

Caterpillar India had earlier announced Rs.80-100 crore additional investments over the next 2-3 years for modernising its two plants. The company is expecting a downsizing of its workforce on account of retirement of around 100 employees by next year