Truck manufacturer Ashok Leyland has announced five non-working days for its plant in Ennore, Chennai, due to the auto industry slowdown. The plant will remain shut from September 6 for five days excluding Sunday, according to a letter the company sent its employees.
The company’s employees received a letter that September 6 and 7 of this week would remain a holiday and September 8, 10 and 11 will also see no operations at the plant.
“As already informed, due to continuing sluggishness and contraction in the commercial vehicle market, the need has arisen to continue to corrective actions to safeguard the interest of the company,” the letter read.
The five days of non-production in the plant is expected to affect 5,000 workers, including 3,000 contract workers, according to reports. Wages for these non-working days will be decided later by the Ashok Leyland Employment Union.
However, Ashok Leyland is yet to make an official statement on the same. “No statement at the moment. When we have something to share we will notify the stock exchanges,” a spokesperson told TNM.
This week, the company reported a drop of 70% in its Medium and Heavy Commercial Vehicle truck sales in the domestic market in August. According to reports, the total sale of medium and heavy commercial vehicle sales dropped by 63% in August 2019. The sale of light commercial vehicles fell by 12% and total vehicle sales including all categories fell by 50%.
Due to the ongoing dip in demand in the automobile sector, Chennai, which is one of the hubs of automobile production, has seen layoffs of at least 5,000 contract workers over the last three months. Major automobile companies have resorted to retrenching contract employees or cutting down working days.
While auto major Maruti Suzuki announced a two-day shut down of its planes in Gurugram and Manesar, Tata Motors, Hero and TVS groups announced temporary factory closures to cope with the steep dip in sales.
On August 9, auto major Mahindra and Mahindra announced a production shut down of 8-14 days in its various plants for the July-September quarter.