In Gurugram, workers stare at an uncertain future as the auto sector faces slowdown

In Gurugram, the country’s largest automotive hub, which houses more than a 1,000 automotive manufacturing companies with a 400-plus labour force, more than 40,000 workers, according to labour rights activists, have been affected by the slowdown
Thousands of unsold cars lie at the Maruti plant in Manesar. The area houses more than 1,000 automotive manufacturing companies, which employ several thousand workers who have been retrenched due to the slowdown in the industry.(Yogendra Kumar/HT PHOTO)
Thousands of unsold cars lie at the Maruti plant in Manesar. The area houses more than 1,000 automotive manufacturing companies, which employ several thousand workers who have been retrenched due to the slowdown in the industry.(Yogendra Kumar/HT PHOTO)
Updated on Sep 24, 2019 08:43 AM IST
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Hindustan Times, Gurugram | By Sonali Verma

It has been two weeks since Sunil Rajan, 27, started working as a driver for a private cab aggregator in Gurugram. He works long hours, sometimes 14 at a stretch, but said he can’t complain considering he was unemployed for five straight months. “With this job, I can now at least pay off my overdue rent,” he said.

Rajan was previously employed with a small-scale automobile manufacturing company – a job he had held for six years. “The company shut in April as it wasn’t receiving many orders and all 150-200 employees suddenly found themselves without jobs. Many of them left for home. A few with whom I stayed in touch advised me to learn driving. They too are working as drivers for large companies now,” he said.


On September 10, finance minister Nirmala Sitharaman said the sector had been affected by several factors, including the implementation of BS-VI (Bharat Stage-6) emission norms, registration-related matters and the mindset of the millennial population, who allegedly preferred using the services of cab aggregators such as Ola, Uber or public transport like the Metro rather than buy a car. For former temporary, casual and even permanent workers in the sector, who are bearing the brunt of the manufacturing slowdown and have been unemployed for months now, this explanation is not enough.

Rajan said he wasn’t convinced with Sitharaman’s explanation of the millennial mindset as the reason for the slump. But he too preferred to opt for such app-based cabs now as driving them brought a steady income. “Why are truck sales down if Ola-Uber is behind the auto slump? The company that employed me manufactured truck parts, but it still got shut down,” said Rajan, a millennial himself.


In Gurugram, the country’s largest automotive hub, which houses more than a 1,000 automotive manufacturing companies with a 400-plus labour force, more than 40,000 workers, according to labour rights activists, have been affected by the slowdown, which is now in its 12th month. Companies with greater contractualisation have seen higher retrenchment, according to the workers. Many of those who have been laid off are migrant workers from Bihar, Uttar Pradesh, Odisha and West Bengal. Many of them have now returned to their hometowns, said members of the workers’ unions at the industries. The ones who chose to stay back have been without a job for months now.

For 24-year-old Mukesh Kumar, who is now one of the thousands looking for a job, it was a usual workday in December 2018 at an automobile manufacturing unit in Gurugram’s Manesar. He punched in at the entry gate and resumed his duty at the production line, making components for automobiles. However, at the end of his shift, he wasn’t able to punch out. He was then told to not turn up for work the next day. “Production is down, they said, without giving any further explanation. I was left stranded,” he recalled.

Kasan and Aliyar, two villages at the edge of the Manesar industrial zone with a large working population, would be packed with people on weekends and off days until a few months ago. They bear a largely deserted look now. “The men living around my rented room vacated theirs and left for their villages two-three months back,” said Sachin, a worker with a vendor of one of the 1,000 manufacturing units at Manesar’s industrial model township, who moved to Aliyar from Maharashtra’s Satara a year ago and has been putting up in a rented apartment. “The rent in my area, which is not even in the better parts of Aliyar, is 3,000. Those who were let go of couldn’t afford rent, let alone saving money to send back home,” he said.


Gurmeet Singh, 26, who hails from Ambala, said he, like many of his fellow workers, doesn’t have the money to book a ticket home. For the last six months, he has been walking for hours daily to find work at another automotive industry. “I have been to more than a 100 companies to find work. All of them turned me back saying there is no work available,” Singh said. Age is also not on his side. Most automotive industries prefer hiring men in their early 20s to work on assembly lines, workers said. “A few companies even told me they won’t hire anyone who’s above 24 years of age. Others said they doubt the reason I was asked to leave was because of my poor performance,” Singh said. He added even the Udyog Vihar-based garment manufacturing units have refused to hire him. “I was told they always need men. But even they have refused to take many of us saying there is no vacancy,” Singh said.

One of the biggest employers in Gurugram is Maruti Suzuki India Limited, which operates plants in Manesar and Udyog Vihar. The company decided to close the passenger vehicle manufacturing operations in both the plants on September 7 and 9, according to company representatives. In August, the company recorded a 33% decline in production as compared to the same period last year. The production of passenger vehicles fell to 110,214 in August 2019 from 166,161 in August 2018, according to figures by the company. Maruti Suzuki India Chairman R C Bhargava, in an email, said the company has so far not renewed the contracts of 3,000 temporary employees.

At the smaller manufacturing units, workers said the duration of the shifts has been cut to almost half due to low demand from bigger industries. “There is a lot of free time in the shifts now. Talks of retrenchment are the norm in the area. Everyone is afraid they’re going to be next,” said a worker who wished to be anonymous. The company didn’t respond to an email for comment.

Workers hired on contract at Gurugram’s automobile units earn between 8,000 to 12,000 a month, according to union leaders. If made permanent by the company, their salaries can increase by a minimum of 10,000. According to union leaders, in many companies here, workers have not been made permanent for months now despite them having worked in the company for years.

Retrenched workers at Bellsonica Auto Component, a manufacturing unit in Manesar that has laid off close to 400 workers in the last eight months according to the union, are now planning to move the labour court against their former employer. Ninety-one of them had, in April this year, collectively submitted a demand notice at the labour department, Gurugram, against the company for removing them illegally without prior notice and a valid explanation. “The notice detailed the process through which the workers were fired, and demanded that they were eligible for becoming permanent months ago. They asked that the company to reinstate them,” said Ajit Singh, vice-president of the workers’ union at Bellsonica. However, the company refused to do so, and a ‘failure report’ was issued by the labour department.

A senior human resources official, requesting anonymity, said, “The fallout of low production means temporary, contractual workers will suffer. We can’t take retrenched workers back until the production improves.” An email to the company wasn’t replied to.

At Shivam Autotech Limited, another manufacturer of transmission gears and shafts in Manesar, close to 100 workers were striking outside the company gates for several months until last week. They claim many temporary workers hadn’t been made permanent in years. Mukesh, leader of the workers’ union there, said, “When we raised these demands with the management, they terminated many of us.” Last week, the company management agreed to make the workers permanent and reinstated the ones who were terminated, according to the workers. Shivam Autotech didn’t respond to questions.

According to union leaders, workers who haven’t been retrenched so far have seen monthly wages fall by a large percentage. Suresh B, a contractual worker at an automobile manufacturing unit, which he didn’t wish to name fearing termination, said his salary has been cut by a third. “I now make around 6,000 a month — down from around 8,500 last year,” he said. Current workers also said the companies have hired new staff in place of those retrenched, but on a much lower wage and on new, updated contracts. “Many fear that they too will be asked to leave any time if they complain,” said Suresh.


According to labour rights activists in Gurugram, jobs losses have been going on for the last year at the region’s automotive industries. “At least 12 factories have closed shop in the Manesar belt in the last one year. The slump has been simmering for a long time,” said Shyambir Shukla, a workers’ rights activist, adding that small industries have been the worst hit as they receive their business from larger industries, which have been witnessing a fall in the production.

The slowdown showed no signs of abating in August, with major automobile manufacturers reporting a high decline in their sales. According to the Society of Indian Automobile Manufacturers, a million contractual manufacturing jobs are at risk due to the ongoing slowdown.

The Gurugram wing of the All India Trade Union Congress, on August 30, submitted a memorandum to the prime minister, asking for his intervention to reinstate retrenched workers at industrial units. “The retrenchment was done without following labour laws. The council wants that labour laws be followed by the companies and that current disputes between workers and the companies have to be solved,” said Anil Pawar, general secretary.

Workers are ready for a long battle. “We are ready to fight for our jobs. There’s no money left to even go home,” said Mukesh Kumar, a former employee with a company here, adding that he too is ready to seek legal recourse.

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Friday, October 29, 2021