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As demand brakes to a halt, contractual auto workers jobless in Haryana

The Federation of Automobile Dealers Associations (FADA) has found that almost 2 lakh jobs have been cut in the last three months because of the slowdown.

Written by Sakshi Dayal | Gurgaon | Updated: August 12, 2019 9:19:53 am
automobile sector slump, auto sector demand slump, haryana automobile industries, haryana unemployment, haryana news According to SIAM, leading automobile manufacturers revealed domestic sales fell by up to 50% in July. (Archive)

Almost two lakh contract workers, who earlier worked at automobile factories in Haryana, have, according to leaders of prominent workers’ unions, lost their daily source of income. As automobile demand experiences a slump, retrenchment has increased over the last few months.

According to the Society of Indian Automobile Manufacturers (SIAM), vehicle sales across all categories fell by 12.35% between April and June this year. This continued in July, with leading automobile manufacturers revealing domestic sales have fallen by up to 50%. The Federation of Automobile Dealers Associations (FADA) has found that almost 2 lakh jobs have been cut in the last three months because of the slowdown.

Among those now looking for alternate employment is Karamveer, a 25-year-old from Bhiwani, who lost his job at an auto components factory in March after working there for over a year. “I have been roaming around in search of another job for almost six months now. I am managing because of my brother, who is a cab driver in Gurgaon and with whom I am staying. If I do not find any work soon, I may have to return to my village and help my father in the fields,” he said.

Others who lost their jobs have not been lucky enough to have such financial support and have had to return to their villages. Jaspreet, a resident of Jalandhar, is among them.

“I completed an Industrial Training course before I secured a job with an automobile company three years ago. However, I was relieved around three months ago, with the company saying production had reduced and they did not have enough work for me,” said Jaspreet.

“I did not have the money to pay rent and live in Gurgaon without a job for more than a month, so after I did not find alternative employment, I returned home and started managing my father’s general store in the village. I am hoping to secure some proper work again soon, but nothing has worked out yet,” he said.

Leaders of workers’ unions of different companies said a reduction in demand for cars is responsible for the fall in production. They blamed this on factors ranging from increased rates of GST to a compulsory five-year insurance cover that has put vehicles out of reach for several consumers.

“The retrenchment has increased in the last three-four months. Around 15% of the contract workforce has been impacted; in all of Haryana, there are more than 2 lakh contract workers without jobs,” said Kuldeep Janghu, general secretary of Maruti Udyog Kamgar Union.

“It is the skilled manpower in technical departments that has been most affected. At Maruti in Gurgaon, around 500-700 workers have been sent on leave. They have no choice but to return to their villages or look for alternate employment elsewhere,” he said.

Maruti did not respond to calls and messages seeking a comment.

At another automobile company, similarly, union leaders said there has been an unusual rise in the number of contract workers who are finding themselves at home since November 2018. They, however, added that the company has hired 1,100-1,200 workers in the last month to meet production targets ahead of Navratri and Diwali.

“Production increases during Diwali and Navratri, so 1,100 to 1,200 people have been hired. But they have been told that it is only for three months. After that, the situation will be bad again,” said Ramesh Pradhan, general secretary of the company’s workers’ union.

While Janghu blamed a high GST for this, Pradhan added that quick revision in emission standards is another factor.

“In 2017, the Bharat Stage IV emission norms had been enforced across the country and companies had to make investments to alter their equipment and technology to manufacture vehicles according to these regulations,” said Pradhan.

“It takes around 10-15 years to recover the investments that have been made. But with BS-VI norms being enforced from 2020, companies have not had time to make that recovery,” he said.

Janghu added, “There is a lot the government can do to improve the situation, such as reducing GST and interest on loans, but until that happens, it will be difficult for things to improve.”

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