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Renault-Nissan India begins massive downsizing; 3,000 may face axe at Tamil Nadu plant

The company has decided to cut production from 40 cars an hour at the plant down to 20, a 50% output cut in the country's largest car plant.

, ET Bureau|
Aug 20, 2015, 10.26 AM IST
A visitor inspects a car at Renault-Nissan's Oragadam factory.
A visitor inspects a car at Renault-Nissan's Oragadam factory.
CHENNAI: Renault-Nissan Automotive India has begun a massive downsizing at its car factory off Oragadam that could bring down the axe on as many as 3000 jobs, according to a company source. The move is in response to piling inventory of cars at the factory and dealer networks over the last three months as sales took a hit. The company has decided to cut production from 40 cars an hour at the plant down to 20, a 50% output cut in the country's largest car plant.

The factory has in its inventory 5,140 vehicles of the alliance's popular SUV in the country, Renault Duster. It latest Multi-Purpose Vehicle Lodgy numbering 4,100 are stashed up at the factory. Besides these numbers, the national dealer network holds 10,500 cars.Renault and Nissan were drawing nearly 12,000 cars from the factory a month, but have now cut the sourcing to 4,000.

The factory, set up in 2010 in the presence of the alliance's chairman and CEO Carlos Ghosn, makes popular brands such as Micra, Duster and Terrano. It was built at an investment of Rs 4,500 crore and a capacity of 4 lakh cars at full ramp up.

Renault India Private Ltd and Nissan Motor India give the manufacturing contracts to Renault Nissan Automotive India Private Ltd. Besides these entities, there is also in Chennai the Renault Nissan Technology and Business Centre India.

While the company has just launched Lodgy, it has also bet big on its sub Rs 4-lakh car Kwid. “The company has planned to disengage trainees, casual labour and apprentices, but the other workers will not be affected,“ said an inside source with the factory. The source said the beginnings are to be seen on the sales front.

The company has also seen an exodus in its sales force with over 71 of the 112 employees quitting the company in recent months. An e-mail sent to the company has not elicited responses till the time of going to the press.

A top official with Renault told it with Renault told it would not be appropriate to comment now. The factory has had labour issues in the past. Last year, some trainee employees fired just ahead of their confirmation as permanent employees had gone to the state labour depart ment against the company.

In response to ET's mails about this particular disengagement, a Nissan spokesperson had said: “RenaultNissan alliance strongly believes in fair and ethical employment practices across the globe. Our employment conditions are in line with the prescribed labour laws of the country. We have not indulged in any wrongful dismissal of employees or trainees. As a responsible corporate, we regularly take trainees under various training schemes and impart necessary skills and knowledge. RNAIPL is under no obligation to offer full-time employment to these trainees. Full-time employment is offered only on availability of specific roles and performance of the individual trainee.“

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