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Wednesday, May 27, 2020

Refrain at Manesar’s auto hub: Partial opening makes no sense

While trucks could be seen idling in yards alongside the Delhi-Jaipur highway, an executive with an automobile manufacturer said the drivers are refusing to take the trucks with cars and other goods, and goods worth crores are stuck on roads.

Written by Sandeep Singh , Anil Sasi | Manesar (haryana) | Updated: April 21, 2020 7:26:13 am
Refrain at Manesar’s auto hub: Partial opening makes no sense “A number of our vendors fall in the red zone (Udyog Vihar) currently. There is no way we can restart operations without those units being functional,” a employee at a Manesar-based garmenting unit said.

On Monday, as the first tentative steps to ease lockdown restrictions at designated industrial zones across the country kicked in, the streets of Manesar — one of the biggest auto ancillary hubs on the outskirts of Delhi — remained deserted.

Despite the Union Home Ministry’s April 15 order that offered relaxations for scaled-down operations of industrial units, the majority of the 2,000 units in the township appeared shut.

The only visible sign of activity was at a non-auto facility: Mankind Pharma’s research centre on the Kasan Gaon Road, an arterial road that houses about a dozen industrial units on one side and Maruti Suzuki’s sprawling factory on the other.

Maruti Suzuki’s 700-acre main plant, operated by the country’s biggest carmaker with almost 22,000 people working on a normal day, has a sizeable presence in Manesar’s industrial landscape and dovetails a number of ancillary units in its vicinity.

On Monday, the only people who marked their attendance were around 100 workers entrusted with maintaining equipment and keeping essential services going at the plant. But for a fresh batch of security guards coming in, there was practically no other activity at the plant or the adjoining casting unit.

Kuldeep Janghu, general secretary, Maruti Suzuki Kaamgar Union, said that besides the security staff, only those required for essential services at the plant are working. Employees are getting salaries, he said. “But they are missing out on other incentives and benefits as the plant is under lockdown. We don’t know how long this situation will continue, and it is very bad for all including the workers,” Janghu said.

An executive told The Indian Express that running the plant at 25 per cent capacity did not make sense as the stockyard was already close to being full. Unless the retail side of the auto business — dealerships and showrooms — were open, there was no point producing vehicles and filling up the yard further, the executive said.

Representatives of a number of large units in the area echoed that view. With Maruti Suzuki deciding against restarting operations, it was unviable for ancillaries to open their units. Shut since March 22, there are indications that the plant might carry out a test run to evaluate and prep for a restart over the next few days, with full-scale operations likely only after May 3.

While trucks could be seen idling in yards alongside the Delhi-Jaipur highway, an executive with an automobile manufacturer said the drivers are refusing to take the trucks with cars and other goods, and goods worth crores are stuck on roads.

Industry representatives indicated that Haryana’s industries and commerce department and its labour department had held consultations with them late Friday evening, following which some Standard Operating Procedures for each industry were to be issued.

Apart from Maruti Suzuki and Mankind Pharma, the other industrial units based in Manesar include Riello Power, Alcatel-Lucent India, Baxter India, Denso, Hero Motors, Honda Motorcycle and Scooters India, Johnson Matthey, and Samsung Telecommunications.

A state government official said the administration had made an attempt to get industry to restart limited operations. “District and block level committee are being constituted to process approvals and monitor containment requirements, including social distancing. These committees are being entrusted with the task of evaluating which factories or industries could be permitted to carry out operations,” the official said.

On the ground, though, all of this did not seem to have convinced a majority of units to open. The problem of workers is another deterrent, executives said. Unit owners are not willing to take responsibility for getting back workers unless there is some guidance on how they can progressively scale up operations.

Industrial units in Gurugram, which has been designated a COVID-19 red zone, are unable to reopen, including Udyog Vihar that falls within municipal limits. This is also being cited as a deterrent as a number of units in Manesar have expanded from Gurugram — and the interdependencies among units at both locations results in the unviability of opening just the Manesar facility.

“A number of our vendors fall in the red zone (Udyog Vihar) currently. There is no way we can restart operations without those units being functional,” a employee at a Manesar-based garmenting unit said.

The problems being faced by businesses in Manesar is symptomatic of issues facing industry across other parts of the country, especially given the interlinkages between districts where business are being permitted to open up and those that continue to be designated as hotspots.

This is evident in the Reserve Bank of India’s data on credit disbursement, wherein the 170 districts designated as hotspots — about 24 per cent of all districts — account for almost 80 per cent of the total credit outstanding of scheduled commercial banks.

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