Representative image
Representative image

Citing COVID-19, General Motors India has laid off 1,419 workmen at its Talegaon plant near Pune by invoking section 25 of the Industrial Dispute Act. According to a report by ETAuto, the Indian subsidiary of the US carmaker has terminated the services of all its workmen at its Talegaon plant, which is located on the outskirts of Pune.

The company has sent an email to all its laid off workers. A copy of the same was provided to the secretary and president of the General Motors Employees Union.

According to the news report, the carmaker has continued to pay its employees though it has not been manufacturing vehicles for the past four months. The company has been incurring a monthly outgo of Rs 10 crore towards employee salaries and has claimed it has offered employees a separation package in excess of the statutory requirement, the report said.

In a statement, the company has said that the workforce will receive lay off compensation under Section 25-C of the Industrial Dispute Act 1947 and they will also be paid compensation due to them, which is 50 percent of the basic wages and dearness allowance previous monthly take home. “Since the lay-off has been declared largely because of COVID-19, being a natural calamity, no prior permission from the appropriate authority has been sought, nor is the same necessary under section 25-M of the ID Act,” a copy of the notice which was displayed at the factory gate stated, the report said.

Speaking to ETAuto, Sandeep Bhegade, President, General Motors Employees Union said the union will challenge the same with the relevant authorities and will continue to fight for the rights at various platforms.

Pandemic impacts auto sector

Having endured and managed to recover from the disruptions induced by a once-in-a-century event, the Indian auto sector has been impacted by the global pandemic. Auto sector sales are closely linked to the economic growth. Leading automobile companies like Maruti Suzuki India (MSI), Toyota Kirloskar Motor and Honda Cars fear dent in sales as COVID-19 cases surged across the country.

"The COVID-19 situation deterioration is obviously a negative for customer sentiment and thus has a negative impact on sales," MSI Executive Director (Sales and Marketing) Shashank Srivastava told PTI on Monday when asked about the impact of second wave of the pandemic on the company's sales. The country's largest carmaker MSI stated that the auto sales were correlated closely with economic growth and also (being a discretionary purchase) with the consumer sentiment.

Lockdowns make it physically not possible to deliver cars but even the deterioration in COVID-19 situation without lockdown also psychologically dents consumer propensity to buy, he noted.

Similarly, Toyota Kirloskar Motor (TKM) Senior Vice President Naveen Soni acknowledged that localised restrictions have impacted order flow and delivery schedules. On manufacturing operations, Soni said the company continues to cautiously proceed with vehicle production.

"Our immediate focus is to fasten and streamline the demand and supply processes with more accuracy and manage production, along with faster deliveries making it easier and convenient for customers by reducing the delivery time," he added.

Honda Cars India said it is keeping a close look at the emerging situation. "Lockdown and weekend curfews will impact sales as showrooms will be shut in some of the markets. We are currently assessing and taking feedback from various cities about its extent," Honda Cars India Senior Vice President and Director (Marketing and Sales) Rajesh Goel noted.

COVID cases on rise

India's total tally of COVID-19 cases crossed the 1.50 crore mark on Monday with a record single-day rise of 2,73,810 new coronavirus infections, while the active cases surpassed the 19-lakh mark.

Registering a steady increase for the 40th day in a row, the active cases have increased to 19,29,329 comprising 12.81 percent of the total infections, while the national COVID-19 recovery rate has dropped to 86 percent.

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