Demand down, Tata Motors shuts plant for six days

Pune, November 07 Tata Motors will keep shut its commercial vehicle plant in Pimpri from November 21 to November 26, due to a slump in demand.

The move follows a block closure of the Jamshedpur plant from November 6 to November 8, and the removal of 2,500 temporary employees over the past few months.

The Pimpri plant produces heavy commercial vehicles, light commercial vehicles, cars and utility vehicles. A statement said “unavailability of finance, coupled with high interest rates, is forcing customers to postpone purchases. Different segments of automobile industry have been impacted at different levels.”

Under the shadow of a global recession, sales in the company’s commercial vehicles unit dropped 29 per cent as it sold 19,514 vehicles in the domestic market this October as compared to 27,103 in October last year. Sale of medium and heavy commercial vehicles also witnessed a decline by 48 per cent and the light commercial vehicles by 10 per cent.

Debasis Ray, head, corporate communications, said the changed situation “will call for appropriate action from Tata Motors from time to time to match production with demand and avoid unnecessary buildup of inventory in the company or with the company’s dealers”.

On the axing of temporary employees, Ray said, “As per production demand we regularly engage and disengage temporary employees. All employees whose services have been disengaged were temporaries. This is a regular exercise.”

The HCV unit of the Pimpri plant employs 7,500 people while the LCV unit has 2,500 employees. When asked about the status of permanent employees, Ray said, “There would be no layoffs.”

At present, many departments in the company are working in one or two shifts.

Tata Motors Employees Union president Sujit Patil said temporary employees are usually engaged for a period of seven months after which they are removed. On the closure of the plant for about a week, Patil said, “We know about the block closure but have yet to receive a written communication from the company. Block closures have happened earlier too. It happens even for maintenance of machinery. The company can go in for block closure for 12 days a year.”

The company has stated that the passenger car plant will work normally though.
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