Maruti Suzuki is set to restart more production lines at its Haryana factories over the next seven days, but restrictions imposed on free movement of manpower will become a challenge for the company.
The maker of Swift and Baleno will reopen plants in Gurugram on May 18-19 after restarting the second production line at the Manesar plant next week. Only one production line is operational for the company based in Manesar that started the vehicle roll out on May 12. Alto, Swift, Dzire, S-Presso, Ertiga and Baleno are made at the Manesar plant.
R C Bhargava, Chairman - Maruti Suzuki, said, “There are uncertainties about production because manpower movement is still not free, there are problems, permits are needed to move around, one need permits to move from one district to another.”
Adding to the woes is the migration of people, many of whom are employed as contract labourers in several component manufacturing factories surrounding the automotive factories has led to shortage of manpower. While Maruti Suzuki is not directly affected by the migration, its vendors have.
Explaining the problem faced by vendors, Bhargava added: “ Much of their manpower has run away to the villages and it is not so easy to get them back because there is no communication. Many smaller vendors have financial problems. These are the areas where the supply chain is running into problems."
Honda Cars is in the same boat as Maruti Suzuki. The maker of the City sedan faced delays in restarting production at its Tapukara, Rajasthan factory as getting manpower from neighboring Haryana has proved to be a challenge. Honda also is not directly affected by the migration of people.
Rajesh Goel, Sr Vice President & Director, Marketing & Sales, Honda Cars India, “With the new relaxations rolled out by the government, we were planning to restart operations in our Tapukara plant in Rajasthan. In order to resume production even at lower level and in a single shift, we require manpower which is living in the neighbourhood and also from nearby areas of Dharuhera, Rewari (both in Haryana). Currently, it appears difficult to get the required manpower due to the travel restrictions and start production as per our plan.”
But, if parts vendors do not get adequate manpower, it would lead to inconsistencies in supply of auto components to the vehicle makers thereby disrupting the production.
“To get to 100 percent components supply means that all vendors have to work and work without interruption. Unfortunately for us a lot of our vendors and their vendors (tier 2 and 3) are located in areas that do not permit industrial activity because they are in containment zones. There is no problem with the worker not wanting to come whether it is temporary or otherwise. The problem is that the regulatory environment makes their movement difficult,” added Bhargava.
At least 70 percent of the 5 million workforce employed in the auto component space consists of semi-skilled and or unskilled contractual labour, according to the Automotive Component Manufacturers Association (ACMA).
Auto companies are resuming operations majorly to finish any 'work in progress' and make do with existing parts inventory to meet booking requests. According to Bhargava May and June would be low production and sales months as the industry learns to adapt to new ways of production coupled with the safety protocols.
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