Slump in auto sector may take its toll in Tiruchi region

Livelihood of workers employed by units manufacturing valves, tyres, etc. affected

Hyundai cars ready for shipment are parked at a port in the southern Indian city of Chennai October 1, 2013. A surprise increase in interest rates and rising car prices in September have tempered hopes for a turnaround in India's struggling autos sector, with some analysts pushing back forecasts for a sustained recovery to next financial year. Car sales in India have fallen nearly 6 percent so far in the current financial year to August, according to the Society of Indian Automobile Manufacturers, as high ownership costs in a slowing economy have prompted consumers to postpone purchases. REUTERS/Babu (INDIA - Tags: BUSINESS TRANSPORT)

The crisis in the automobile industry has impacted livelihood of at least a few thousands of workers in Tiruchi region employed by units manufacturing valves, steering, tyres and other components.

A leading automobile components manufacturer operating two units near Tiruchi has reportedly cut down the number of working days substantially in a month, due to stagnancy in orders. The company was also said to be in the process implementing a Voluntary Retirement Scheme.

Lay-offs are not unusual any more, industry sources said. With the inventory piling up, hundreds of apprentices with ITI and diploma qualifications are also being sent home. Unlike the case of regular workers, the apprentices are not in a position to expect severance pay.

“Only a few years back, ITIs and polytechnics in the region were unable to fulfil the demand of the auto industry. Every candidate used to have multiple offers. Now, the current situation has demoralised the students,” a principal of a private polytechnic college said.

The cause for worry is the prediction of the industry watchers that it will take at least two to three years for the auto sector to stabilise, he observed.

The crisis in the sector does imply that the commitments made at the Global Investors Meets by auto industries promising investments running to a few hundreds of crores of rupees in the Tiruchi-Perambalur belt will not materialise in the near future, N. Kanagasabapathy, president of Tiruchi District Tiny and Small Scale Industries' Association, said.

According to a sub-contractor for the industries, the worst is yet to come. The likelihood of the industries going for further downsizing of the workforce cannot be ruled out, sources said.

The overall impact of the down-slide in the automobile sector will be felt more in the coming months since a chunk of the workforce in industries in Chennai region belong to the central region, an erstwhile industry owner said.

At a time when several thousands of workers in the fabrication industries have already been thrown out of jobs due to decline in orders for BHEL, the crisis in the automobile sector has dealt a double body blow to the local economy, Mr. Kanagasabapathy said.