PUNE: Tata Motors, India’s biggest auto maker by revenues, is going for a third block closure (some assembly lines) for two days on August 16 and 17 at its Jamshedpur factory in Jharkand to reduce inventory level at dealerships.
Till date over 450 dealerships of various auto brands have been shut across the country due to sales slump, rendering thousands jobless.
“It is a block (some assembly lines) closure for two days from August 16 to 17 at our Jamshedpur factory to align production with the slowing market demand,” an official spokesperson of Tata Motors told Financial Chronicle.
The factory, which produces a range of medium and heavy commercial vehicles, intermediate commercial vehicles and pick-up tempos, will, however be open on those days, the official said.
In fact, this is the third block closure at the Tata Motors after it went for a block closure on August 1 at the Jamshedpur facility, and for three-day block closure during August 8-10 at its Pimpri-Chinchwad factory, near Pune, and Jamshedpur as well.
The Pune plant, one of the biggest, employs over 10,000 permanent workers apart from contractual employees.
“This is being done for maintenance and also because the production is low. During this period the company will bear 50 per cent cost while for the remaining 50 per cent, leave of the employees will be deducted as per the agreement between the company and the union,” a letter from Tata Motors sent to the employees union stated.
Earlier, the passenger car unit of the Pune plant remained shut for two days informally, an office bearer of the Tata Motors Employees Union told this paper.
Sources at Tata Motors say there has been a sharp decline in purchase order of the vehicles at the Jamshedpur unit. They said with no visible sign of immediate recovery until the government announ-ces some stimulus package for the beleaguered auto industry across segments, things could get only worse, especially with job losses.
Sources also revealed that Tata Motors had also cut production of its small pick-up trucks at its Pantnagar plant by 17 per cent in August.
Mahindra and Mahindra (M&M), too, announced last week that it will be shutting down production for 8-14 days in its various plants during the ongoing July-September quarter.
According to the company, the decision has been taken to align its production with the sales requirements.
In fact, the impact of block closure and sales slowdown is more severe on vendors catering to the OEMs.
“With our orders cut to a half, we are drawing on our capital for sustenance, but we don’t know how long we can do it,” a auto component supplier to Tata Motors at Pune said.
Layoffs of workers seem imminent if demands for automobile does not pick up soon, he pointed out.