Pune: Last month, A.N. Shinde, 52, lost his shop-floor job after his employer Amforge Industries Ltd, a maker of auto forgings, decided to close its factory, a casualty of the economic downturn that has caused automobile sales to slide and thrown the future of thousands of workers into doubt.
While Shinde goes out to participate in daily protests by laidoff plant workers, his 50-year-old wife Meena frets about the family’s future, sitting in their one-bedroom apartment in Pimpri-Chinchwad, a hub of the auto components industry on the outskirts of Pune.
The Shindes have to figure out how to pay the Rs42,000 it costs yearly to send their son to an engineering institute where he is in the third year of a diploma course. Just as pressing, they have to pay Rs1,100 every month for the next 13 years on a home loan. They took the loan eight years ago and dipped into Shinde’s provident fund to buy the flat, whose bright pink walls are in contrast to the mood of despair inside.
Testing their luck: Diploma holders from Industrial Training Institutes arrive at the Tata Motors factory gates every Wednesday, hoping for jobs. Ashesh Shah / Mint
“I had dreams of having a decent life with food on the table and money enough to educate my kids,” says Meena Shinde, whose older son was run over and killed by a truck two years ago. “Now, there is no question of those dreams.”
To be sure, the situation the Shindes find themselves in is hardly unique. As economic growth, which averaged 8.9% in the past four years, slows, automobile makers are battling a severe demand crunch that’s wreaking havoc with the lives of workers employed across the industry and its ecosystem.
According to data from the Society of Indian Automobile Manufacturers, production of passenger vehicle for December declined almost 33% from a year ago, while production of commercial vehicles sank to 14,883 from 48,751, less by almost 70%. The production of two-wheelers increased slightly from 86,133 to 91,479.
The twin townships of Pimpri-Chinchwad form an industrial hub that hosts some 4,000 factories and 7,000 small and medium enterprises that supply forgings, castings and other components to the automobile industry.
Some of the world’s best-known auto companies, including the now-embattled General Motors Corp., Volkswagen AG and Daimler AG, had announced plans to set up manufacturing facilities. At least Rs10,000 crore in investments has been announced for the region in the last 18 months and government officials say some 1.5 million cars and trucks will be manufactured three years from now.
Competing for jobs
Domestic manufacturers Tata Motors Ltd and Bajaj Auto Ltd are still the big boys in this neighbourhood.
Outside the sprawling Tata Motors factory in Pimpri-Chinchwad, a few hundred people are assembled on a sweltering Wednesday. They are here from places as far as Latur, which is a Rs300, 13-hour bus ride away, for a temporary job at the company.
This will mean a maximum 240 days of work a year, the most permissible to prevent them from unionizing. But it comes with benefits—insurance, provident fund and bonuses—luxuries denied to the next rung of workers, contracted labour. Besides, you need to be a graduate from a vocational training institute—the kind the Shindes’ son is studying for—for a temporary position, while contracted labour is mostly for the grunt work.
According to D.P. Pagar, additional labour commissioner for Pune district, the region is home to 300,000-500,000 contract workers and around 200,000 temporary workers.
Uncertain future: (clockwise from above, left) Babasaheb Waghole, who lost his job at Amforge Industries, used to augment his income selling vegetables; Meena Shinde, 50, has taken up home delivery of milk, earning 50 paise per pouch, after her husband lost his job last month; Salim, a juice vendor, is on the brink of winding up his business and returning home to Kanpur, after sales fell and his income plummeted. Ashesh Shah / Mint
“Between 150,000-200,000 contract workers in Pune’s industrial areas have lost their jobs and a large portion of them have gone back home,” says Eknath Pawar, an elected member of the Pimpri-Chinchwad Municipal Corporation. Pawar, a former general secretary of the Telco Employees Union (Telco is now known as Tata Motors) and a worker in Tata Motors’ transmission division for 20 years now, also owns Total Management Services, a placement firm for contract labour.
Over the last couple of months, Taco (Tata AutoComp Systems Ltd), a Tata group component maker, has gradually eliminated at least 800 contract workers supplied by his company, Pawar said.
But that does not seem to deter the hundreds of hopeful young men who arrive at the Tata Motors factory gates every Wednesday, the hiring day. A temporary job fetches Rs6,000-7,000 a month, and more than worth the Rs1,000 or so many of them will spend on this journey.
Recruitment at standstill
“I came here almost every week since Diwali, but there has been no recruitment at all for three months,” said a 23-year-old from Latur. He, like the other workers assembled here, declines to give his name because he is registered with the company for employment and fears that a quote in a newspaper could have him blacklisted.
That is a risk they can illafford, given that competition has only become worse since the slowdown. “It is now a regular practice for touts and agents to take Rs500-1,000 from people like us so that they can get us in as temporary workers,” said a 24-year-old man from Nanded. Mint could not independently verify this allegation.
One recent Wednesday, a few days after Tata Motors announced that its January sales were the best in three months, a company man stepped out of the factory into the evening, and started called out alphanumeric codes for job candidates.
“I might not get the job this time but at least they have started recruiting again. That itself is a great sign,” said one candidate waiting outside.
At Mahindra Hinoday Industries Ltd, a company that manufactures magnets for various industrial applications, the 382 unionized permanent workers now only work five days a week, but an extra hour every day. “We are doing almost every imaginable work in the factory other than sweeping. In tough times, it is better to multitask. That is better than having no job at all,” philosophizes Anil Barahate, a union member who worries, nonetheless, about a Rs3,500 home loan instalment that becomes due every month.
Already the monthly salary has become bimonthly. And management has hinted at a 20-30% wage cut, according to Anand Kharade, president of the Pune Zilla Kamgar Sangh (Pune district workers’ union) to which the Mahindra Hinoday’s employees union is affiliated.
But in these times, even multitasking sometimes offers no relief. After all, if everyone can multitask, there isn’t much left for one to do.
Babasaheb Waghole found that out the hard way. Also laid off by Amforge, the same company where Shinde worked, 42-year-old Waghole saw trouble coming and a few months ago started selling vegetables in the evenings to supplement his monthly salary of Rs4,000. The vegetables brought in an additional Rs6,000 a month for about four hours of work daily, a fortune for his family of four, including two schoolchildren.
But now other former colleagues and their wives are also selling vegetables, and his earnings from that are down to Rs50 a day. “From 40 people selling vegetables last year, there are now over 180-200 people. Also, with thousands of contract workers and their families going back, demand for vegetables has fallen,” says Waghole, adding that the ones that remain are making do with home-grown sprouts and lentils.
Last week, he exited the vegetable business. In corporate speak, his cash flow is now zero. “Soon, I have to look for something else to do,” he said. For now, he takes turns sitting at the protest.
The slowdown is also affecting people who have no direct connection with the auto industry. Like Salim, 30, who has been selling juice for the past two years on the road outside the Tata Motors plant in Chinchwad, catering to workers and visitors. His earnings are down from Rs600 a day in October to Rs200, and Salim is moving. The juice vendor, who only gives his first name, pays Rs800 a month for a tenement he shares with his brother and nine-year-old son Kabir. He will soon be headed home to a village near Kanpur city in Uttar Pradesh to join his wife.
“I barely make enough to feed my child and keep a roof over his head, so what is the point hanging around here?” Salim says.
In the Shinde household, meanwhile, Meena Shinde has started delivering pouches of milk to other families, starting at dawn, earning 50 paise per bag. With just 25 customers, she earns a a pittance compared with the Rs6,500 her husband used to bring home every month.
“It’s a small beginning. I have to keep the home fires burning if my husband is going to be jobless,” she said.