India’a largest commercial vehicle and leading carmaker, Tata Motors Ltd (TML), has internally announced a block closure for three days starting today, 8 August, at its production plants in Pimpri (Pune) and Jamshedpur. Mint also learns that Tata Motors’ luxury car unit, Jaguar Land Rover (JLR), is also observing the block closure for three days starting today, in an attempt to cut down the volumes of locally assembled models.
The company is halting its vehicle production activities to align its inventory according to the current market demand across both plants, including the JLR unit in Pune.
Other strategic departments such as the electronics division and the engineering research centre (ERC Pune) remain open during the period, signalling the quantum of ongoing work in the product development domains for BSVI emission norms and electric vehicles.
“As indicated earlier, external environment remains challenging, leading to demand contraction. We have aligned our production to actual demand and adjusted the number of shifts and contractual manpower,” a Tata Motors spokesperson said.
The company manufactures passenger cars and commercial vehicles at its Pune plant. The Jamshedpur plant rolls out commercial vehicles.
These block closures come on the sidelines of sharply declining wholesale dispatches, which were down more than 31% year-on-year in July for the entire passenger car segment. This was the steepest decline in wholesale figures recorded in the last 20 years. On the other hand, the commercial vehicle industry saw a decline of 10.4% Y-o-Y for the last month. According to preliminary sales reports, Tata Motors led the average industry decline with sharper cuts of 39% Y-o-Y and 36% Y-o-Y for the passenger car and commercial vehicle segments, respectively, in July.
JLR’s domestic sales for July remain unavailable.
Santosh Dalvi, who represents Tata Motors’ Permanent Employees Union (Pune), said there was no threat to the jobs of permanent employees due to the shutdown. “The permanent employees sign yearly agreements with the company, which also gives job security during such times when a shutdowns happens,” he added. The employee agreement takes into account 18 block closures in one year.
“Eighteen days of no production in a single year is a regular norm when the plant is used for maintenance activities. At present, the three-day block closure will be used for upgrading the assembly lines, preparing for BSVI and similar jobs. Many departments are going to be operational,” he said.
Dalvi, however, refused to comment on job losses faced by contractual workers due to the shutdown.
Earlier, Dilip Pawar, a union leader who represents the Vishwa Kalyan Kamgar Sanghatana in Pune, told Mint that the ongoing slowdown has “directly resulted in massive production cuts at the manufacturing units in and around Pune”.
“While we don’t have accurate number of job losses at the moment, I estimate that more than 10,000 daily wage workers have become unemployed over the past months as plants that were running three shifts a day are now operating only a single shift,” he said. He suggested that while most of the job cuts were made by vehicle manufacturers such as Tata Motors, Mahindra & Mahindra (M&M) and Volkswagen India in the Pune-Chakan automotive belt, all the retrenched workers were temporary and full-time employees have not been fired so far.