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Tata Motors to offer VRS

Karl Slym in New Delhi on Wednesday. (PTI)

New Delhi, Jan. 22: Tata Motors will introduce a voluntary retirement scheme as the company seeks to cut costs following a record quarterly loss of over Rs 800 crore in the July-September period.

“The industry as well as India is going through a rather protracted downturn. Therefore, there are lots of things out there to enable us ensure our structure is suitable. Voluntary retirement scheme (VRS) allows these people to move on with our support,” Tata Motors managing director Karl Slym said. He, however, ruled out any drastic reduction in the workforce.

A company spokesperson from Mumbai said VRS would be offered to staff at the administration-level and was not aimed at any particular manufacturing unit. Last year, Tata Motors had slashed the number of workers at its Pantnagar plant by 1,200, a 21 per cent cut. The unit employed 5,838 people by the end of 2012-13.

The spokesperson said it had not fixed any target for the offer and that the scheme would be offered to those who wanted to take early retirement.

According to the company’s annual report, it employed 62,716 permanent staff in 2012-13, of which 41,597 were based in India. Slym did not specify if the company would be recruiting people.

Tata Motors has six plants in the country in Jamshedpur, Pune, Lucknow, Sanand, Dharwad and Pantnagar. The company’s sales fell about 42 per cent to 6,537 units last month.

Slym said the company would make an investment of Rs 3,000 crore in commercial vehicles and passenger vehicles development.

Sales of the company’s passenger vehicles in the nine months ended December 2013 fell to 1,55,571 units, a drop of 37 per cent compared with a year earlier.

Tata Motors is not alone in being hit by a prolonged slump in sales. Hinduja flagship firm Ashok Leyland had offered VRS to its executives during the third quarter.

 
 
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