Tata Motors rests 75% temps in Jamshedpur as demand in low gear

Feb 16 2013, 14:07 IST
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SummaryWeak demand for commercial vehicles has forced Tata Motors and subsidiary TML Drivelines to rest around 75% of its 5,500-odd temporary workers here in the last few days.

Weak demand for commercial vehicles (CVs) has forced Tata Motors and subsidiary TML Drivelines to rest around 75% of its 5,500-odd temporary workers here in the last few days. The auto major’s heavy and medium commercial vehicles (M&HCV) plant here, which employs a permanent workforce of around 5,000 people, has seen five block closures so far in 2012-13. Incidentally, the two millionth CV will roll off the assembly lines on February 19.

Tata Motors reported lower sales volumes in the home market of 2.03 lakh units, down 10.2% year-on-year in the three months to December, while average realisations dipped 10.6% y-o-y.

Speaking to FE, Telco Workers’ Union (TWU) general secretary Chandrabhan Singh that said with the market not having improved much since December, the management had lowered the monthly production target for M&HCVs to 3,500 chassis for February, lower than the roughly 3,900 units rolled out in December. Singh added that the temporary workforce was typically rotated and that close to 75% of the workforce “has been rested in the last two to three days”.

In fact, the total temporary workforce had been rested during the last three-day block closure between January 14 and 16 but had been fully recalled, only to have been asked to sit it out from January 25 to February 2. The Jamshedpur plant turned out around 4,500 HCV/MCV chassis in January, a shade better than the average output in recent months.

On Thursday, Tata Motors reported a consolidated net profit of R1,628 crore, down from R3,406 crore a year earlier.

Consolidated Ebitda came in at Rs 5,660 crore, down 17% y-o-y driven by a sharp decline in M&HCV volumes in the home market and a moderate decline in the performance of its Jaguar Land Rover unit.

“We believe M&HCV volumes will remain under pressure in the near term and the standalone business will continue to report losses for the next few quarters,” Kotak Institutional Equities wrote in a report.

The auto major’s Jamshedpur plant had earlier in 2010-11 achieved a landmark by becoming the first factory in the country to cross production of 1 lakh commercial vehicles during a year.

Slow lane

* The Jamshedpur plant, which has 5,500 temporary and 5,000 permanent workers, has seen 5 block closures so far in FY13

* The plant turned out around 4,500 HCV/MCV chassis in Jan, a shade better than the average output in recent months

* In 2010-11, the plant became the first factory in India to cross production of 1 lakh commercial vehicles in a year

* Tata Motors reported lower sales volumes at home of 2.03 lakh units, down 10.2% y-o-y in the 3 months to December

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