: Sikander Kumar (28), a contract worker at Hero Motorcorp plant here for more than four years, was “verbally” told to “proceed on leave” last month citing fall in demand due to demonetisation. And he says he is not alone.
Around 1,000 workers have lost their jobs with the two-wheeler company since demonetisation and are struggling.
‘Settle your dues’
“On December 17, the company told me and a bunch of fellow contract workers that the production had gone down due to fall in demand in the wake of demonetisation and directed us to proceed on leave. The company has so far asked more than a 1,000 workers to go on leave since November 27. Now we are getting calls from the office asking us to get our dues settled. It practically means that we have all lost our jobs,” said Sikander, now leading a fight against the company. The matter is now pending before the Additional Labour Commissioner.
Even as the fight continues, Sikander, the father of a four-year-old, and others like him survive on credit. But they do not know how long will they be able to manage.
Post demonetisation, the automobile sector faces considerable fall in sales leading to layoffs. “We had a monthly turnover of ₹3 crore before November 8, now it has reduced to half. Consequently, we had to cut jobs by more than 50 per cent. Some got frustrated at not being able to open accounts and left the jobs on their own. We supply components to Hero Motocorp and with a reduction in demand for two-wheelers the ancillary units like ours are bound to suffer. The situation is no different for several hundred ancillary units in the automobile sector in this region,” said Karn Talwar, who owns Century Auto Engineering Private Limited, manufacturing machine components and sheet metal.
No improvement in sight
Mr. Talwar added that demand in the automobile sector usually picks up in January after a slowdown in December every year, but this time around there was no improvement in the situation.
Climax Overseas Private Limited managing director Parmeet Singh Sood conceded that lack of liquidity in the market had hit the automobile sector hard and it was difficult to predict how long would it take for the situation to improve. As the product reached the buyer from the manufacturer, passing through the distributor and the retailer the element of cash came into it at some stage and therefore the cash crunch had hit the market, explained Mr. Sood. “We supply components to automobile majors and have suffered 20-25 per cent fall in sales. So far, we have not resorted to layoffs, but the need could arise in the weeks to come,” warned Mr. Sood.
Vishal Nath Gupta, who runs auto-components manufacturing unit, Aavran, in Industrial Model Township Manesar, said that slowdown at the year end was expected but this year around it was considerable. “The ancillary units are already in bad shape. The demonetisation could prove to be the last straw on the camel's back,” said Mr. Gupta.
