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Automobile Sector
Workers Bear the Brunt -
Foreign Owners Milk the Concessions
The automobile industry in our
country is employing around 3.7
crore workers directly and
indirectly. Out of these 80 % are
contract workers and only 20% are
permanent workers. The manufa-
cturing and assembling activity is
concentrated in three regions.
They are Manesar-Gudgaon area
in North India; Pimpri-Chinchwad
area near Pune in Western India
and Chennai and Coimbatore in
South India. Original equipment
manufacturers and auto ancillary
makers are the suppliers are
components and parts to all the
world class cars and other
automobiles corporations. Various
foundries and engineering units
provide support to auto-manufa-
cturing industry.
From November 2018 the
sales of passenger vehicles and
two wheelers has slowed down.
Because of this the inventory is
piling up and the industry bosses
pushed dealers to stock more and
more vehicles. This is the result of
over production. The slump in the
demand for vehicles is due to the
general economic slowdown. So
the clogged pipeline will have to be
cleared before the dealers can
place fresh orders. The drop in
sales is being reported exagge-
rated terms by the industry.
In fact the profit margins in
auto sector still better than the
average for the manufacturing
sector. When we look at Maruti-
Suzuki’s finances the company last
year had a handsome pretax profit
margin on sales at 12.6%, with a
huge Rs.36,500 crore parked as
investment. The payment of
dividend has more than doubled in
two years. The profit margins in the
October - 2019
industry in some companies like
Baja Auto and Eischer motors is
surpassed that of Maruti-Suzuki.
The profit margins of some
companies like Mahindra &
Mahindra and Ashok Leyland
though have come down a bit, they
are better than the industry’s
average upper middle class. The
foreign MNCs which own most of
the automobile companies do not
want to lose even a marginal
amount of their profits. They are
not satisfied with the incentives and
concessions from the government.
Through various policies the
successive governments have not
only benefited the auto companies
but also have facilitated buyers of
cars from the upper middle class
with tax concessions and lucrative
business of car loans and
insurance. By wanton neglect of
public transport, the government
goaded the affluent middle class to
buy cars and two wheelers. But the
recent crunch in money supply due
to demonetization, increase in fuel
prices, hike in vehicle insurance
costs, road tax, low availability of
finance and imposition Bharat-VI
emission compliance coupled with
income and career uncertainties
led to slowdown of sales.
Such s slowdown is an intrinsic
part of the capitalist system and its
production exclusively based on
exploitation of labour power of
workers and on super-profits,
particularly in the present phase of
neo-liberal capitalist policies of
‘globalisation’.
But autosector corporate
made a big hue and cry about the
general economic slowdown
ringing alarm bells, demanding that
government should come down to
their rescue on the ostensible
pretext of saving employment of
workers of the industry. They
projected as if they are conducting
the business of manufacture of
cars and vehicles to provide
employment to people, skillfully
covering up their purpose of
exploitation of labour and earning
super-profits. The media in the
control of big bourgeoisie too
played this game inflating ‘need to
rescue’ the employment and to do
this the government has to give tax
concessions to the auto corpo-
rations as well to the general
manufacturing sector.
On the other hand, the auto
corporations have ruthlessly trans-
ferred the burden of the slowdown
of sales on to t backs of the
workers forcing them to bear the
brunt of the so-called slowdown.
Through various forms of laying-
off workers, the managements
deprived more than 2,00,000
workers – contract workers- of their
livelihood. The permanent workers
too are penalized in the form of
reducing work days-calling them as
non-working days and working
holidays without pay, as well as
reducing the number of working
shifts.
In the Manesar-Gurugram
belt, at the Suzuki plant some
workers were sent on indefinite
leave without pay; its third assembly
line has been shut down and the
first assembly line is running on
single shift. While it has been
sending its contract workers who
had been on company rolls for a
decade on indefinite leave, it is
keeping temporary workers hired
for 6 to 7 months. Around 4000 non-
permanent workers are laid off in
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