Companies

No plans to cut jobs: Motherson Sumi

Bloomberg March 20 | Updated on March 20, 2020

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Motherson Sumi Systems Ltd, which counts Audi AG, Daimler AG and Volkswagen AG as its top customers, sees the worst of the coronavirus pandemic over in 45 days.

The firm has enough liquidity to manage €1.14 billion ($1.2 billion) of debt held by its holding company, top officials said on a call with analysts. Motherson Sumi has no plan to cut any of its about 150,000 employees at 270 factories across 41 countries.

“We are only imagining it to be a short-term thing,” said Director Laksh Vaaman Sehgal. The worst-case scenario would be some of these factories shutting for 45 days, similar to its experience in China, he said.

The Noida-based maker of autoparts, including rear-view mirrors and HVAC systems, has seen its stock lose more than half its value this year due to the global slump in demand for cars and more recently the virus outbreak.

The company, which gets about a quarter of its revenue from Europe, expects its key customers in the region, especially in Germany and Spain, to shut plants for 15-20 days to contain the spread of infection while factories run by its US-based clients continue to function. Motherson Sumi’s 27 plants in China are now functional after shutting down for weeks and all but one are operating at about 80 per cent attendance.

“We have enough of liquidity, both in terms of the cash on the balance sheet as well as the unused credit facilities,” said Chief Financial Officer GN Gauba.

Published on March 20, 2020

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