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Auto sector crisis has hit 5 lakh workers in Pimpri Chinchwad belt, says small units body

Radheshyam Jadhav Pune | Updated on August 20, 2019 Published on August 20, 2019

While many industrial units in the region have stopped third shifts, others have rolled back overtime allowance for workers   -  Bloomberg

The slump in the automobile industry has hit about five lakh workers in the Pimpri Chinchwad industrial belt in Pune. Pimpri Chinchwad and areas such as Chakan, Bhosari and Talawade house some of the major vehicle manufacturers.

According to Pimpri Chinchwad Small Scale Industries Association, about 12,000 small and medium industries depending on original equipment manufacturers (OEMs) are facing a major crisis with work orders dropping by 25-30 per cent.

“The situation is slowly worsening for the past six months. There are no layoffs as of now, but already industrialists are forced to reduce working hours of their employees as orders from companies are down by 25-30 per cent. This has affected about five lakh workers in the industry. If the slump continues, we fear a major crisis,” Sandeep Belsare, President of the Association, told BusinessLine.

 

He added that as OEMs are struggling with slump, smaller industries dependent on them, vendors, sub-vendors and allied businesses are facing the heat.

While many industrial units have stopped third shifts, others have announced that there will be no overtime allowance for workers. Pune region, one of the largest auto hubs in India, houses Tata Motors, Mahindra & Mahindra and Bajaj Auto and international auto majors such as Volkswagen and Mercedes. Maharashtra accounts for nearly 35.1 per cent of the country’s output of automobiles by value. Major players have implemented block shutdown in plants stating that the external environment is challenging, leading to demand contraction.

Managements have been stating that they have aligned production to actual demand and adjusted the number of shifts and contractual manpower.

Belsare added, “Big companies are facing problems and GST is one of them. They are demanding a cut in GST. The government must take a call on this. Also, it must take steps to repair the damage caused to the market sentiment by promoting electric vehicles....”

Published on August 20, 2019
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