Goa small ancillary units face closure threat: report

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SME Times News Bureau | 22 Mar, 2010
A recent media report has said that a large number of micro and small ancillary units in the vicinity of Automobile Corporation of India Ltd (ACGL) at Honda in north Goa fear financial crisis and apprehend a closure in near future owing to loss of work orders following workers problem in the ACGL for the last few months.

The report published in today's issue of The Hindu Businessline newspaper quoted Mr Atul Naik, President of Goa Small Industries Corporation (GSIA) as saying that the units have petitioned the government with their problem.

Naik told the newspaper that there was a continued shutdown at ACGL plant at Honda-Sattari due to unresolved issues between their management and labour union. The ancillaries in Honda Industrial Estate, Pissurlem Industrial Estate and Bicholim Industrial Estate are not having any work for the last 20 days.

As a result, there is a possibility of closure of a large number of micro and small ancillary units dependent on ACGL for work orders. Naik told the newspaper that on behalf all the ancillary units, GSIA has submitted a memorandum to the Chief Minister, Digambar Kamat, with a copy to the Secretary (Industries) and the Director, DITC.

The GSIA is seriously worried about the survival of the micro and small ancillary units and seeks urgent intervention of the Goa Government for an amicable solution of the issues at ACGL.

ACGL, with investment from the auto giant Tata Motors Ltd., sustaining nearly 130 micro and small ancillary industries, provides employment to thousands of local rural youth. The memorandum has pointed out that the industry is just starting a recovery from a long economic slowdown and these ancillaries to ACGL were the worst affected as ACGL's Bus Body Division's export market had vanished overnight and production had come to a trickle.

However, since January 2010, an increase in demand from Tata Motors was seen and it was providing a hope of a recovery to these units. But the dispute over wage settlement between the management and workers union of ACGL has again brought the production activities at ACGL to a standstill in the last few days.

The units have said that the delay in completion of orders from Tata Motors by ACGL, may force Tata Motors to source their requirements from other bus body builders including their Tata Marcopolo at Dharwad. It may also force them to withdraw from Goa entirely, as their action at Singur, West Bengal have shown.

While talking to the newspaper, Naik warned the State Government saying: "For ancillaries of ACGL, there is no alternate market in Goa and a slowdown at ACGL could mean a closure for all the ancillaries to ACGL, with consequences not only for investments and employment but also to the reputation and ability of the State of Goa, to attract investments in industrial sector in future."