Home >News >India >Industries mull output cut as workers pack up

NEW DELHI : Consumer goods and automobile firms are preparing for possible production cuts as migrant workers—indispensable to these industries—start returning home, fearing a repeat of the events of 2020.

Maharashtra on Tuesday imposed tougher restrictions on mobility and business till the end of the month, in addition to earlier curbs that fuelled a reverse migration. Workers want to leave before the pandemic worsens, fearing they may be left stranded, as in 2020.

Some consumer goods firms—mostly those with plants in Maharashtra and Gujarat—fear disruptions in production. Kamal Nandi, business head and executive vice-president, Godrej Appliances, admitted Maharashtra is facing “a little bit of a challenge" and that the company’s plant in Shirwal near Pune may see some impact.

“With these anticipated stricter lockdown norms coming, we are seeing reverse migration of contract labour—25-30% of contract workers are going back. This will impact production, manufacturing in the state," he said.

The Shirwal plant makes refrigerators, air conditioners and washing machines.

Nandi said the firm is in peak production of cooling products for the summer and a shortage of labour will hit output. “Our suppliers, too, are experiencing similar issues," he said.

For now, the company’s plant at Mohali in Punjab is fully operational.

Fears of a stricter lockdown are prompting workers to flee, said Mayank Shah, category head at biscuit maker Parle Products. The packaged foods company has two of its 10 plants in Maharashtra. The company is working on limited capacity across 10 plants in line with state directives that require firms to ensure social distancing norms. “Some migration has started across states like Maharashtra and Gujarat, but we are not facing a major issue at the moment," Shah said.

He said the company is better prepared this time: “Systems are optimized to ensure you’re producing more of those stocks which are far more efficient. Movement of goods has also been not impacted."

But tension is running high in the automobile sector. Some migrant workers in the Pimpri-Chinchwad district, an important auto hub on the outskirts of Pune, have started moving back to their native places.

Migrants are indispensable to the auto industry, working as truck drivers, canteen staff and technical workmen on factory shopfloors and paint shops.

Pimpri-Chinchwad is home to factories of Tata Motors, Mahindra and Mahindra, Bajaj Auto and Mercedes Benz, among others. “The auto industry has been urging the state and Centre to allow vaccination of factory workers in Maharashtra. They are also front-line staff since they run our economy," Sanjeev Vasdev, managing director of Flash Electronics, an automotive component manufacturer, told Mint recently.Shortage of migrant workers could also lead to disruptions in the production schedules of suppliers, especially the smaller ones.

According to a senior executive of one of the biggest auto component manufacturing companies in Pune, although it may be premature to talk of production cuts, “there seems to be no strategy to keep the migrant workers in Maharashtra".

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