Barely a day after announcing plans to shut down its heavy vehicles plant in Jamshedpur for a brief period of three days, Tata Motors is learnt to be exploring a similar closure of its commercial vehicles unit in Pune.

A company spokesperson said , ?Tata Motors plans to shut down commercial vehicle plants in Lucknow and Pune due to a slump in demand.?

According to union sources, the management is mulling over issuing a notice to its workers announcing a block closure for six days from November 22. The notice is likely to be handed over to the union members soon.

Reacting to these reports, the company informed the Bombay Stock Exchange (BSE) that the Pune plant shutdown would be a measure taken to avoid unnecessary inventory build up. Tata Motors clarified that its passenger car plant was working normally. Tata Motors adjusts production according to the demand. Besides the normal double shift operation, the company can also opt for a single shift or even a temporary shutdown in case the demand falls, and a triple shift if the demand surges, the company stated to the exchange.

?As seen in October 2008, unavailability of finance across the industry, coupled with high interest rates, is forcing customers to postpone purchases. Different segments of the automobile industry have been impacted to different levels,? a statement issued by the company said. ?This will call for appropriate action from Tata Motors, from time to time, to match production with demand and avoid unnecessary build-up of inventory in the company or with the company?s dealers,? the company spokesperson said.

A shutdown of this nature could mean a 50% cut in wages for workers for the closure period as per the wage agreement signed with the company, sources in the union said.

This development at the Pune plant has made its vendors nervous. For the first time recently, the company has delayed vendors? payments.

The last payments to vendors were made in the first week of October. But now, payments are already overdue for 30 days and there is no indication when they will be paid.

There are talks of the company moving to a five-day week schedule. The most affected is the commercial vehicles plant where inventory has built up. TACO, which is among the biggest vendors and a group company, is learnt to be among the worst affected.

Vendors said company in a meet held three weeks ago had indicated production cuts, forcing some of the units to consider a four-day week scheme. This decline in production at Tata Motors is expected to have a cascading effect on ancillary units in the area as around 500 odd units supply to Tata Motors.