Job Losses To The Tune Of About 10 Lakh In Auto Component Industry If Situation Continues To Be The Same

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New Delhi: A top official of the Automotive Component Manufacturers Association of India (ACMA) said that though the Indian auto component industry is managing the downturn without major job cuts, but there will be job losses to the tune of about 10 lakh if the situation continues.

“Most of the auto component makers are managing the downturn by reducing the number of working days and retraining the workers. There are job losses. But that is being minimised as we know that getting back a trained worker is difficult,” Ram Venkataramani, President, ACMA, said.

According to him, the crisis in the automotive industry is unprecedented. The 15-20 per cent cut in production by vehicle makers has led to a crisis like situation in the auto component sector.

“If the trend continues, an estimated 10 lakh people could be laid-off,” Venkataramani said.

The automotive component industry contributes 2.3 per cent to India’s gross domestic product (GDP), 25 per cent to its manufacturing GDP and provides employment to 50 lakh people.

Last fiscal, the industry sales stood at Rs 3.95 lakh crore ($57 billion), logging a growth of 14.5 per cent over the previous year.

“This fiscal the industry may witness a flat growth,” Venkataramani said.

According to him, the industry players have made significant investments to roll out products for Bharat Stage VI (BS-VI) emission norm compliant vehicles.

 “So, even a slight drop in sales results in huge impact on the bottomline,” Venkatramani added.

In Chennai (also called Detroit of India) and its surroundings, which are dotted with auto ancillaries, the downturn is so far being managed without major job losses.

Echoing Venkataramani was S. Kannan, President, Centre of Indian Trade Unions (CITU), Kancheepuram District.

“The vehicle and component makers are reducing their contract workers and shutting down production for some days to save costs. Few thousands of contract workers have lost their jobs in Chennai and its surrounding auto and auto component units. If the industry situation continues like this in the next quarter, there will be more job losses,” Kannan said.

 “The cost cutting measures are such that the office air conditioning systems are switched on at 8 a.m. and turned off at 5 p.m. So, one cannot sit late in the office and sweat it out, literally. This is done to save power. Work from home is also encouraged,” a senior official of an auto ancillary told IANS not wishing to be named.

 

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