Atlas Cycles has closed operations at its last manufacturing unit in Sahibabad, near Delhi, citing lack of funds to run operations of the factory. However, company's CEO NP Singh Rana said that the closure is only temporary, news agency PTI reported. The operations are expected to be resumed once the firm raises nearly Rs 50 crore by selling surplus land, he added. The company had shut the operations on June 3, observed as World Bicycle Day. Employees of the manufacturing unit claimed that the factory was closed without any prior notice.
On Wednesday, a notice was posted on the factory gates that read: "... the company had been passing through a financial crisis for several years and had exhausted all its funds to keep the factory afloat. But now, there are no funds left. We are facing difficulty in arranging funds for our day-to-day operations. We are also unable to buy raw materials. In these conditions, the management is not in a position to operate the factory."
Atlas laid off 431 remaining employees, though Rana insists they continue to be on the payroll of the company and will be paid "lay-off wages" upon marking attendance daily. While he did not elaborate on the payment to employees, "lay-off wages" typically equate to 50 per cent of basic salary and dearness allowance.
The plant, the biggest in the country, started in 1989. It was the last operational plant of the Atlas Cycles with a monthly production of over two lakh bicycles.
Meanwhile, on June 2, the company had informed the stock exchanges that the Sahibabad unit of the company is not in a position to continue manufacturing operations due to financial constraints.