Tata May Shift Auto Plant Due to Protests

Aug. 22, 2008
Production of the world's cheapest car, the Nano, is being threatened by violent protests.

India's Tata Motors threatened on August 22 to pull production of the Nano, the world's cheapest car, out of West Bengal state if violent protests continued against the plant. "It is for the people of West Bengal and Kolkata to decide whether we are unwanted or to accept us as a good corporate citizen," Tata Group chairman Ratan Tata said. If the protests do not end at the Singur plant, "we will very reluctantly need to move," Tata said following the Tata Motors annual meeting.

"The move will be at great cost to Tata Motors and to shareholders (but) there is a concern about our people, a definite concern about not being wanted," he said. The company has invested $350 million in the project. The Nano -- which Ratan Tata conceived with the aim of getting Indians off their motorcycles and into safer cars -- was unveiled with huge fanfare early this year at India's premier automobile show in New Dehi.

But since the sporty four-door, five-seater with its 623-cc engine was shown to industry acclaim, its ride has been anything but smooth. There have been frequent, often violent, protests by activists angered by the state government's acquisition of farmland for the project. There has also been strong political opposition. The walls of the plant are plastered with warnings to workers to leave or "face the consequences."

"There is a sense of tension, violence and disruption (at Singur). Obviously, it is not a conducive atmosphere. The compound wall is broken down, materials stolen. It is not possible to work under police protection," Ratan Tata said.

Despite the unrest, Ratan Tata said the company hoped to have the Nano in showrooms by October -- its target launch -- or "close to October." The plant is slated to initially produce 250,000 Nanos annually.

The Singur Land Protection Committee protesters said earlier the group was "not against industry" and wanted the factory. But the group is angered at how the state government took land for the plant, and wants it to return 400 acres of 997 acres seized from farmers who wanted to stay on their property.

Meanwhile, powerful West Bengal Trinamool Congress chief Mamata Banerjee, a fierce critic of the project, said she would not budge from her demand for the government to return the land. Her party has threatened to cut off the plant's power and water supplies starting August 24. "We don't want anybody to move out of West Bengal, but at the same time, we will not bow to any kind of pressure," Banerjee said. Asked if she was ready to talk to the Tatas, she replied: "In principle, we would like Ratan Tata to concede to our demand for the return of 400 acres forcibly taken away from unwilling farmers."

The West Bengal government is keen to draw investment to create job-generating industries in the poverty-hit state. But the shift from agriculture to industry has stirred debate and demonstrations as many projects encroach on farmland. Tata Motors, India's top vehicle maker, has said it could have built the Nano plant in other parts of the country with better infrastructure, but wanted to develop under-industrialized West Bengal "as our gift."

"We have not come to exploit the people of West Bengal," Ratan Tata said. But "if anybody is under the impression that we have made this investment and will not move, they are wrong. It is not a hypocritical investment. Whatever be the cost, we will move out if the situation so demands."

Copyright Agence France-Presse, 2008

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