Auto major Ashok Leyland, the country’s third largest maker of commercial vehicles, announced a five-day shut down from Friday in its plant in Ennore near Chennai owing to fall in demand and “ contraction of the commercial vehicle market”.
This is the second shutdown in two months. It closed its Pantnagar production facility for nine days in July. A statement by the management said: "As already informed, due to continuing sluggishness and contraction in the commercial vehicle market, the need has arisen to continue the corrective actions to safeguard the interest of the company. Hence, it has been decided to declare September 6,7, 10 and 11 as non-working days and September 9 as 6th-day non-working day”. Sept 8 is a Sunday.
Wages for those 'non-working days' would be decided after discussion with the employees union, said a statement issued by the company's AGM-ER K Ramesh Kumar.
He said employees would be paid ‘sixth day compensation’ (SDC) for the non-working of the sixth day on Sept 9. Staff not reporting for duty despite being called to work would lose wages for that day, he said, adding that essential staff required to work would be intimated by their department heads.
Ashok Leyland reported a 50 per cent drop (YoY) in the vehicle sales to 8,296 units in August 2019. Trade union leaders at the AL’s Ennore plant said the company produces about 100 heavy vehicles, including multi axles, 100 LMVs at the Hosur unit and 200 LMVs at Pantnagar in Uttarakhand per day. A union leader said nearly 28,000 vehicles remain unsold due to fall in demand and Government order to all automakers to switch over to BS-6 emission norms, a direct jump from Bharat Stage 4 to 6, skipping Bharat Stage 5.
The Supreme Court last October barred sale of Bharat Stage IV vehicles from April 2020, the deadline set by the Government. It refused to give any grace period to auto makers to make the switch.
This is one of the reasons for the recession in the auto market.