Tata Motors will stop production of all heavy commercial vehicles, including trucks and other multi-axle vehicles, for four days from December 19 with the company terming the move, that comes amid falling sales, as a block closure for plant maintenance.
According to the workers’ union, daily production targets had come down to 300 vehicles in the last couple of months against the usual 400.
“Usually a slump is witnessed in the automobile sector during this time of the year as people wait for the arrival of the New Year to buy vehicles. This increases the inventory,” said Santosh Singh, the spokesperson of Tata Motors Workers’ Union.
The closure for four days would affect around 5,000 employees at the Jamshedpur plant.
“Fifty per cent of the salary during the period of the block closure will be adjusted against leave. The company will pay the rest. The management decided on the block closure after consulting us. The shutdown will help optimise establishment and other costs,” Singh said.
Tata Motors had opted for a two-day block closure in April last year. In December 2013, it shut down the Jamshedpur plant for nine days owing to a recession in the auto sector.
The announcement of the closure immediately soured the mood at Adityapur industrial area in neighbouring Seraikela Kharsawan district that is home to 600 firms that manufacture for, and supply, directly or indirectly, to Tata Motors.
Their operations will be hit as a result of the four-day closure.
“Suspension of work for four days at Tata Motors will result in financial loss for ancillary units at Adityapur,” said president of Adityapur Small Industries Association (ASIA) Inder Agarwal, adding that most ancillary units would either be shut or operate at a limited capacity during the four days.
Auto Profiles, one of the leading ancillaries of Adityapur that supplies sheet metal to the auto major, will down shutters for four days.
“Our’s is a big ancillary which supplies to Tata Motors on a day-to-day basis. We have no space to stock manufactured products. We have, therefore, taken a decision to shut the unit for four days,” said MD Bikash Mukherjee.
He said the demand for heavy commercial vehicles witnessed a fall ever since the Centre increased the maximum load carrying capacity of heavy vehicles, including trucks, by 20-25 per cent in July, besides scrapping the mandatory annual renewal of fitness certificates for freight carriers.
Mukherjee said finance was another issue that had hit the sale of heavy commercial vehicles. “All nationalised banks have stopped financing heavy commercial vehicles because of huge NPAs. This is also affecting sales,” he explained.