Jamshedpur, Sept. 14: The fact sheet of Auto Profiles, a leading ancillary unit of one of India’s biggest auto makers Tata Motors, is enough to show how in five months, a darkening economic climate has lopped off jobs by a half, reduced revenues to a fraction and slashed production hours by a third.
The large-scale engineering company in the industrial hub Adityapur, Seraikela-Kharsawan, which has core competence in manufacturing sheet metal components for medium and heavy commercial vehicles, is one of the desperate victims of the weak rupee and economic slowdown.
On September 2, the tier-I ancillary unit limped back to production after a three-day shutdown.
The company shut production for three days from August 29 due to the Tata Motors block closure.
“We see no hope of recovery. The situation is grave and will deteriorate further,” managing director Bikash Mukherjee, who also owns the company, told The Telegraph on Tuesday, scotching any optimism during the upcoming festive season.
Tata Motors apart, Auto Profiles is also a supply chain partner to Tata Cummins and Telcon (leading manufacturers of earth-moving equipment). Last year, during March-April, it invested to the tune of Rs 40 crore to go bullish on expansion.
“We invested in expansion with an aim to hike our monthly turnover from Rs 12 crore to Rs 18 crore. But, we could never achieve that target. The slowdown in the auto sector, which started last year, took a turn for the worse in recent months,” Mukherjee said.
Going by trends, the September turnover would hover around Rs 1.5 crore, he added, hinting at further downsizing in a company that has seen 800 layoffs in five months.
“At present, our manpower strength is around 800. In the next couple of months, we will be forced to reduce the workforce of temporary and casual workers by another 200,” he said.
Insecurity was palpable on the faces of employees.
“Kaam rahega ya jayega yeh batana mushkil hai. Hum sab bhagwan bharose chhorte hain,” (It’s tough to say if I’ll have my job or not. I leave everything to god),” said an employee at the press shop.
A worker at the assembly shop said they had lost all hope of increment and incentives such as bonus.
“We understand the company is going through a bad phase. We should at least get our salary on time or else it will be difficult to run the family,” said the worker.
Production manager S.S. Singha, one of the oldest staffers, said they were confronting this situation for the first time.
“The situation is worse compared to the 2008-09 recession, which lasted only for a few months. This year, the slowdown sneaked up on the auto sector in April 2012. The slide is unremitting. We see no hope for improvement this fiscal,” he said.
Singha said they invested in expansion and modernisation to meet Tata Motors requirements, which during normal times rolled out some 400 heavy vehicles a day.
“Now, demand is low. Their daily production is less than 180 vehicles. The fall in numbers hurts us as one of the ancillary units,” he said.
The recent three-day block closure in Tata Motors sparked fears of similar shutdowns in the near future.
Auto Profiles recently started exploring other client options such as commercial vehicle manufacturers Daimler India Commercial Vehicles, which makes the BharatBenz brand of trucks. But, the overall downturn has pushed demand down.