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  1. Premier struggles to stay afloat

Premier struggles to stay afloat

Vehicle manufacturer Premier has restarted operations after a 14-day shutdown, but the company faces a stiff challenge in turning around a business struggling with liquidity crunch, labour unrest and piling up of losses.

By: | Pune | Published: June 21, 2018 3:38 AM
premier, premier vehicle manufacturer, Premier pune plant, Premier SUV Vehicle manufacturer Premier has restarted operations after a 14-day shutdown, but the company faces a stiff challenge in turning around a business struggling with liquidity crunch, labour unrest and piling up of losses.

Vehicle manufacturer Premier has restarted operations after a 14-day shutdown, but the company faces a stiff challenge in turning around a business struggling with liquidity crunch, labour unrest and piling up of losses. The company’s plant in Chinchwad, Pune, has been manufacturing heavy engineering parts and machine tools, and for a brief period, manufactured automobiles. Premier’s attempt to re-enter the automotive business with the compact SUV Rio failed. Operations have been scaled down at the Pune plant with machine tool manufacturing remaining the main activity and some engineering work. The plant is making CNC gear-cutting machines and CNC vertical turning centres. Around 220 permanent workers of the company have been agitating over delayed wages and non-payment of dues.

Workers took their case to the Pune industrial court where the company promised to clear dues by June 2018, but it has failed to keep its promise so far, Ashish Shinde, president of the Premier Employees Union, said. An eight-member committee of the Premier Employees Union had a showdown with the company management on May 29 at the company office after which police were called in and the union members were evicted from the office. Subsequently, the company shut down the plant for 14 days in the first half of June 2018. It reopened after the intervention of the Pune labour commissioner’s office, but the situation is still tense as the company has suspended the eight union members. Rakesh Mehta, Premier’s head of HR and administration, said the company has been passing though a difficult financial period with cumulative losses crossing `202 crore in the last three years.

Mehta blamed it on the difficult business environment and the government policy changes affecting the capital goods and wind sector. There has also been a delay in payment from customers, including the government, he said. There is also a debt of around `600 crore to be serviced after loans from various banks were restructured with Edelweiss Asset Reconstruction Company. Around 4,91,000 shares of Premier have been pledged with Edelweiss. “All money is payable and we are not denying it,” Mehta said. He also admitted that payments have been delayed to both workers and management staff but he added that the company will pay all the arrears as and when revenues are generated after normalcy in production is restored.

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