Maruti Terminates Temp Workers, First Time Ever; Tata Motors, Steel Firms Shut Down Factories – Worst Year For Automobile Sector?

The ongoing battle for car sales is not showing any signs of improving. We have covered many stories dedicated to the degree of car sales getting worse in the country and the same for Maruti Suzuki.

It has now come to notice that Maruti Suzuki India Ltd  had to let go of a number of its temporary workers to compensate with the slowdown in sales of its vehicles.

Not just this, Tata Motors too, is showing bad results due to slump in the market, cutting down its days of operation, directly affecting steel sector companies, especially in and around Jamshedpur area.

Maruti Suzuki Lets Go off its Temporary Workers

It has been no secret how badly the slowdown in sale has stricken the automobile industry in the country. This slump has been the worst in last ten years and is showing no signs of improvement since some time now. The scenario is so much worse for Maruti Suzuki which builds a car for every second family in India.

It employs temporary workers, whose count was 18,845 on an average for 6 months, which just ended in June 30. This number was marked to be 6% or 1,181 lesser than the same period last year. It has also had job cuts had accelerated since April. Some are saying that it might stop hiring new employees until the case brightens up.

Maruti Suzuki confessed that it hasn’t reduced the strength of its permanent workforce, comprising of about 15,892 individuals. It reported a 33.5% decline in sales in July to 109,265 vehicles compared to July 2018, cutting production by 10.3% in the first six months of the year.

The average wage of a temporary worker is reported to be around Rs 17623 a month.

Steel Sector Companies Shutting Down Due to High Tarrifs

The slump in car sales and demand is not just affecting the latter industry but also the auto ancillary companies and steel industries that depend directly on them. Due to the terrible sales of cars and market slowdown, Tata Motors had to face continuous shutdowns in some past months.

It will close down for the fourth time since last month, this time from Thursday to Saturday, with Sunday already being a holiday. It also suspended over 1000 temporary workers until August 12, while permanent ones are to join on August 5.

There was production for only 15 days per month for the last two months since it has orders for only a week’s production in August. This has resulted in limited work in about 1000 auto-ancillaries dependent on Tata Motors in the Adityapur Industrial Area (AIA). About 30 steel sector companies were on the verge of closing down while about a dozen downed their shutters from Thursday.

To top this off, the state govt has risen power tariffs by 38% with effect since April, hitting steel industries badly, as electricity is an essential raw material, shutting down 25-30 cos, leaving around 30,000 direct and indirect workers jobless. The power supplier unit, JBVNL charges a tariff of Rs 5.50 per unit, highest when compared to DVC charging Rs 2.95 per unit  and Jusco charging Rs 3.50 per unit, other 2 power suppliers.

Jamshedpur and Adityapur-based industries are supplied power through JBVNL, hence baring exorbitant tariffs.

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