Around 20-30 lakh workers, mostly contractual, could lose jobs in the Gurugram-Manesar-Bawal automobile belt due to slump in demand in the wake of COVID-19-induced lockdown, said Harbhajan Singh, chairman of Ease of Doing Business, CII, Haryana.
Speaking to The Hindu , Mr. Singh, also former director of Honda two-wheelers, said that the Gurugram-Manesar-Bawal automobile belt, which employs around six million workers and is one of the auto-manufacturing hubs in the country, is likely to bear the brunt of the lockdown. Among others, Maruti Suzuki, the largest car manufacturer in the country, as well as Honda and Hero, the leading two-wheeler manufacturers, are based in Gurugram.
He said the business size of the automobile sector was feared to shrink by almost 50%, thus impacting jobs. “All Original Equipment Manufacturers’ [OEM] sales number will go down. If the sales go down, the production will go down. With the decline in production, the jobs will be impacted since labour cannot be fruitfully engaged. Job loss can be in the range of 30-50%. Nationally, the sector employs around 14 million people. And if there is an average of four people in a family, the 50% job loss could cause havoc,” said Mr. Singh, also chief of strategy and people care, SGT University.
He said that since the industry had legal flexibility in laying off the contractual staff, they will be first to be sacked.
Demand driven
Everything is ‘demand driven’ and production cannot be 100% even if the industry wanted because of new laws, lack of labour and constrains of supply chain, he said. He also added that most of the companies in this belt were operating at 10-40 % capacity and it might take them 3-6 months for the normal cycle of production to resume. The expenditure on ‘lifestyle’ would go down post lockdown, which would hurt the automobile sector, besides aviation, tourism and real estate, he observed.
In an indication of things to come, Bellsonica Auto Component India Pvt. Limited, the first-tier vendor of Maruti, sacked around 300 contractual workers. As many as 119 regular staff were laid-off at Rico Auto Industries Limited’s Dharuhera plant.
Ramesh Kundu, general manager (human resources) of Bellsonica said that the company’s production had slumped to 15%, though he hopes it would touch 40% by the first week of July.
“We paid the lockdown dues to regular and contractual staff in Gurugram, but it is difficult to engage the staff without production,” said Mr. Kundu. The company has around 1,300 workers.
Lodging complaint
Rico Auto Workers Union president Raj Kumar said the company had laid-off almost 70% of its regular staff at the plant and they would formally lodge a complaint to the labour department in this regard. The company’s management could not be contacted despite repeated attempts.
Inqlabi Mazdoor Kendra central committee member Shyambir Shukla said that the lockdown had presented an opportunity for the industrialists to lay-off staff and hire labourers on fixed terms. He said it would increase the exploitation of workers and the State governments were further facilitating it by suspending the labour laws.
