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Pune auto ancillary units feel the heat
Kaustubh Kulkarni in Pune
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December 03, 2008 07:38 IST

More than 150,000 people working at the 5,500-odd auto ancillary units in and around Pune feel lost every time Tata Motors [Get Quote] announces a block-closure of its commercial vehicle plant in Pune.

India's largest CV maker shut down its plant for 12 days in the last two months. Following a demand slump, other automobile companies here have also announced production cuts.

Result: While prominent ancillary units are on the verge of cutting jobs, more than 4,000 temporary workers employed on a "clock-hour" basis have already been laid off.

While some of these units have reduced the duration of working shifts from 8 to 4 hours, most are working only in single shifts of 8 hours a day. Sandvik Aisa, which employs around 1,300, has decided to operate only five days a week. SKF Bearings has stopped production of certain auto parts and has shifted more than 300 workers to its other unit.

Speaking to Business Standard, Vanaz Engineers' general manager (auto components) K P Velayudhan said as of now, there have been few job cuts in auto ancillary units. Only temporary workers have been laid off. "But if the situation continues like this, then a large number of people would become jobless." he said.

Vanaz Engineers has cut production by almost 17 per cent over the last two months.

Autoline Stampings, another prominent auto ancillary unit, which has Tata Motors as its primary client, is working only in single shifts. "There has been a heavy cut in production and we might have operations only for 4 hours a day," a company official said. The company employed more than 2,500 workers, some of whom have already been laid off.

There are around 700 auto ancillary units registered by the Maharashtra Industrial Development Corporation in Pune, Pimpri-Chinchwad, Talegaon, Bhosari, Chakan, Ranjangaon, Pirangut and Bhigwan. These units jointly employ around 70,000 workers.

A large number of these units are dependent on Tata Motors, while some supply components to Force Motors [Get Quote] and Bajaj Auto [Get Quote].

Apart from the MIDC-registered units, there are another 5,000 small units and workshops in the Pune region, which supply components to Tata Motors and other auto makers. These units jointly employ around 80,000 workers, mostly temporary.

Suresh Mhetre, president of Pimpri-Chinchwad Small Industries Association, said over 100,000 auto ancillary workers are fearing job loss, while more than 4,000 have already been laid off.

"The situation is really bad. The increased cost of raw materials, pending finished goods and decreasing supply have led to a major financial crisis for auto ancillaries in and around Pune. Most of these depend on Tata Motors and Bajaj Auto. And these two companies are not able to absorb components," Mhetre added.

The Mahratta Chamber of Commerce, Industries and Agriculture too has predicted possible job cuts in auto ancillary units.

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