After surviving Covid, auto cos look to shed flab

Automotive manufacturers are shedding jobs, shutting unviable operations and adopting new management structures, under what the industry calls “rightsizing” to emerge leaner, stronger and nimbler from the pandemic and a prolonged slowdown.The recovery since the lockdown has been swift in the passenger vehicle sector, but the market is still far from reaching the peak hit in 2018. The situation is worse for two-wheeler and commercial vehicle makers, as sales are still at levels last seen five to 10 years ago. For three-wheeler and bus manufacturers, sales have dropped to multi-decade lows as public transport has been hit hard by the pandemic.Close to 5,000 people have taken voluntary retirement, or in the process of doing so, at Honda Motor, Tata Motors, Ashok Leyland, General Motors India and Apollo Tyres since the beginning of the pandemic. The industry has also fired a similar number of employees, even as companies have cut salaries and withheld bonuses as they negotiate weak demand and an uncertain business environment. Companies are also restructuring roles and responsibilities of employees and management, and shrinking office spaces and shutting unviable factories, as they review fixed cost structures while ensuring employee welfare and wellbeing, say industry sources. Job rotations and redeployments have become the order of the day to improve efficiencies.81398550At Mahindra & Mahindra, Tata Motors and Maruti Suzuki, organisational structures are being realigned. In December, Tata Motors announced a VRS for its permanent employees and workers. Mahindra recently completed what it called an organisation “simplicity” initiative with consultancy firm BCG helping it in the project. With the new management set to take charge from April 1 — Anish Shah taking over as the MD from Pawn Goenka — Mahindra is seeing a host of changes from job rotations to shutting down of departments and functions.According to people in the know, Vikram Garga, head of marketing at the company’s automotive division, has been moved to the farm sector to oversee the strategy function. Departments like events and institutional sales have been shut down and the employees from there have been reassigned to other businesses.Jaguar Land Rover recently cut its India workforce by a third. In December, Honda Cars India announced plans to stop production at its Greater Noida plant. In November 2020, commercial vehicle maker Ashok Leyland announced a VRS for permanent employees across its offices and factories. Tata Motors, Honda and Ashok Leyland didn’t respond to ET’s request seeking comment. Component maker Bharat Forge completed a VRS scheme last year for employees at its plant at Mundhwa in Pune and a unit at Satara, and 20 workers opted for it.

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