Auto parts makers cut working days on reduced demand
Commercial vehicle segment vendors are the worst hit.
- Bijoy Ghosh
Slowdown effect: Wheels for off-highway vehicles being manufactured at the Padi
plant of Wheels India Ltd (file photo).
T. Murrali
Chennai, Dec. 13 Following the slowdown in the automobile sector in the
country, auto component manufacturers have reduced the number of working days
to three to five days a week depending on the production schedule of their
customers . Those catering to non-automotive customers, especially in the oil
and gas and power sectors, are managing the show without much cut in their
operations.
The Chairman of Automotive Component Manufacturers' Association (ACMA) -
southern region and Joint Managing Director of Wheels India, Mr Srivats Ram,
said that due to slowdown in the auto industry, component manufacturers have
been forced to cut their production.
Vendors feel the heat
"The impact is based on the segment the vendors are catering to," he said.
Those who cater to commercial vehicle segment are the worst hit. And the
vendors of passenger car manufacturers are feeling the heat now, he said. It is
more or less the same for the two-wheeler segment.
The Padi industrial belt in western Chennai has a large number of TVS group
companies, including Brakes India, Lucas-TVS, Sundram Fasteners, Sundaram
Clayton, Sundaram Brake Linings and Wheels India. While Lucas-TVS works for
three days in a week, Wabco-TVS (joint venture between Sundaram Clayton and
Wabco of the US) has reduced its working days to four from the normal five
days. The Executive Director of Sundaram Clayton, Mr H. Lakshmanan, said the
company continues to work as usual. However, it may close for a week for
maintenance towards the end of this month, he said.
In the case of Sundram Fasteners, the company used to work three shifts seven
days a week (with the seventh day considered as overtime). Sources in the know
said that with power shortage in Tamil Nadu, the company now works for two
shifts for six days. The company feels that it need not cut down the number of
working days further. Wheels India deployed its staff from its commercial
vehicle division to other divisions to optimise productivity. However, in order
to manage the production schedule, the company plans for a 10-day block holiday
this month, Mr Ram said.
Mr S. Ganesh, Managing Director of the Vijayawada-based Liners India, said the
company was managing by reducing the number of casting lines. However, it
closed for a week in November and hopes to close for the same duration in
December also. "We should be able to run fully from January," he said. With the
recessionary trend hitting the SMEs hard it is necessary for banks to change
the norms for NPA because of poor cash flow, he added.
Maintenance holidays
"Till the 1990s, auto component manufactures used to have maintenance holidays
every year. When the industry began witnessing growth this was dropped," Mr Ram
said. Also, maintenance became part of the process to enhance productivity. The
current situation forces many component manufacturers to resort to maintenance
holidays again, he said.
A similar situation prevails in Karnataka too, sources said. While exporters
are working for four days those supplying to only the domestic market are
working for three days, they said.
Auto component exporters do not expect an improvement in the situation even if
the US comes out with a bailout package for the automobile industry.
Sources from Jamshedpur said a number of component manufacturers have stopped
production as a majority of them supply to Tata Motors. In November, Tata
Motors' plant in Jamshedpur was closed for more than 15 days and this month
also the plant is not operating to full capacity. Since the vehicle
manufacturer is not able to give an exact schedule, the situation is grim, the
sources added.
http://www.thehindubusinessline.com/2008/12/14/stories/2008121451130400.htm
Government cannot make man richer, but it can make him poorer
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