Will Mamata Sink with Singur?

Tata Motors is keeping West Bengal and the country guessing if it will get out of Singur totally or ultimately come back. As Tata Motors got the land it asked for and the state government signed the agreement, it has no reasons to change its plan to accommodate Mamata’s wishes if TM can afford. And that’s what it is doing. It wants the government as well as the opposition politicians not to interfere with the implementation of industrial projects. Each day’s delay means cost escalation and that kills the competitiveness of a product in the age of globalization. As such, many doubt about the feasibility of its low cost Nano from a Greenfield project with an investment cost of Rs 1500 crore that has by now an overrun of few hundreds of crore.

It may be a big loss for Tata Motors with a lot of construction and machinery in place in Singur. If it has already installed the dedicated equipment and machinery, the launch of Nano from its other plants at Rudrapur or Pimpri will get delayed unless it has a duplicate set. Shifting of the dedicated equipment from Singur even temporarily will be equally difficult and the locals as well as the government may resist that. As it appears, TM planned higher capacities for capital-intensive engine and sheet metal stamping manufacturing with assembly facilities at different locations in future to feed the zones.

The decision of having a high volume press shop at Singur was very prudent. Sheet metal panels’ stamping requires special steel sheets that would have come from Tata Steel at Jamshedpur that is pretty close to Singur through road. The process creates a lot of wastage that could have been sent back to Jamshedpur for recycling. Finished panels from Singur could have been transported to different assembly plants in future.

Tata Motors wanted most of the vendors closer at hand. Many in West Bengal might not appreciate the need of having all these vendors in the same campus. Perhaps it is because of lack of the knowledge of the Toyota Production System that has been universally accepted by the automakers and even in many other sectors to cut down the cost and to take productivity to the peak. It emphasizes on just in time production and consumption. It’s important for Nano where every single rupee or paise matters for keeping the bottom line in black. Nano can win only with continuous innovations and disruptive cost reduction in every activity till it reaches the customer. That was the reason to have vendors in proximity. It could eliminate the transportation cost and ensure the high quality of supplies with engineering support of Tata Motors.

Besides the 60 odd component vendors in its integrated plant at Singur, TM would have encouraged the revival of engineering industries with facilities for casting, forging, and machining in West Bengal with huge employment potential.

Is there a possibility of Tata Motors moving out of West Bengal lock, stock and Nano? Perhaps Tata Motors wouldn’t have liked it, but it is difficult to run a manufacturing plant in West Bengal with the amount of interferences of the union leaders and politicians of the state who have innovated and mastered many avenues of exercising their so-called democratic rights such as work-to-rule, strike, bandh, gherao. The credit goes to the leftists.

Perhaps Ratan Tata who took a bold and brave step to enter West Bengal must have got the shock of life because of the happenings at the fag end when he was getting finally ready to see his dream realized. Tata must be having second thought of the suitability of West Bengal for Nano.

With so much money already gone in the project, TM might be back to Singur but not with the same dream planning of a global standard auto making plant with an ultimate capacity of a million cars a year. Singur may remain one of the plants manufacturing Nano with limited expansion plans for future. Tata Motors will find a different location for mother plant. I recommend a port town in Gujarat or Tamil Nadu for making a mother plant to serve the global market.

Because of the situation at Singur, the engineers and employees of Tata Motors must be working overtime to produce Nano from its other facilities to keep up with the time frame of the commercial launch.

But will the whole episode give any advantage for Mamata politically? Are the people of Singur and the nearby area happy with the fate of Singur getting doomed? How long the people of Bengal bear with the ‘triya hath’ (adamancy of the woman)? But alas! In democracy, it goes on like this. But Singur’s dream of development as Detroit or even as Gurgaon seems to fading away.

However, I would have loved to ask Mamata a question and assurance. Will the farmers or their descendants not sell their land ever against all the lucrative offers?

Singur latest:

Advertisements
This entry was posted in indian politics, industry. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s