CEO Watch Indian farmers drive Tata Motors’ Nano project to a halt
It is a hard blow to the Nano. The manufacturing of the tiny "revolutionary," less expensive car in the world ($2,500) is being stopped. "Tata motors has been constrained to suspend the construction and commissioning work at the Nano plant in Singur in view of the continued confrontation and agitation at the site," declared Ratan Tata’s spokesman yesterday in the Hindustan Times. The company also declared that it was looking at alternative sites.
The announcement came even as Mamata Banerjee, leader of the protests in Singur, agreed to talk with the state government and West Bengal Governor offered to mediate. The statement could put more pressure on Mamata and force a solution to the vexed issue around acquisition of land.
The Tata Motors statement on suspension of work at the Singur unit, located 65 miles away from Calcutta, highlighted growing impatience on the company’s part. Ratan Tata had plans to hit the market, and especially the Indian lower middle class, with the Nano before Dussehra, a major bank holiday weekend in India starting on October the 9th. Tata has invested some $350 million in this unit, in which 250,000 cars a year were expected to be manufactured.
The day Tata decided to produce the Nano in Singur in early 2008, a ferocious battle started. With on one side, the land-workers not willing to sell their lands, and on the other side West Bengal State willing to industrialized the area.
This project had the backing up of the middle class and of the high profile manufacturers of Calcutta, but the anger of the poor landowners found help in the opposition party Trinamool Congress. This party pushed the expropriated landowners to reclaim their land by blocking the plant.
After the statement, speaking to protesters outside the Nano factory, Mamata made a major climb down accepting the "land for land" theory. This is the first time the opposition party leader has moved from her stand that some 400 acres of land acquired for the project was not negotiable.
Nevertheless, "a detailed plan to relocate the plant and machinery to an alternate site is under preparation," the Tata statement continued. If that happens the company intends to relocate people who have been hired and trained at the Singur site, the statement said.
