Employees from the Indian arms of European carmakers Škoda-Volkswagen and Renault and Chinese-owned MG Motor have been assured that their jobs are safe. Auto Industry is going through a severe crisis as our country is going through a 40-day nationwide lockdown. Even though their business plans are wrecked and cash flow is choked, these auto-makers report that no pay cuts will be put in place either.
All the aforementioned companies have made several investment commitments to India. It aligns with the product launches that were planned for 2020. Therefore, they believe that protecting their present workforce is critical to their long-term goals.
Škoda-Volkswagen, which acts as the parent company for the entire Volkswagen Group, went as far as to avow ramping up, hiring in India. They have reassured their employees that the commitment to pay timely bonuses to more than 90% of their employees will be honoured . The top management, however, has decided to defer their bonuses till business operations have returned to normalcy.
Gupratap Boparai, MD of Škoda-Volkswagen India has said he wanted to attempt the most difficult things first. Reducing structural costs and overheads seemed to be his first priority. On the other hand, he wanted to ensure that there would be no job or pay cuts, in the process.
He stated, “We have already communicated to our employees that we will not reduce jobs or salaries; bonuses for the past year will also be paid. The management will be working overtime to reduce other structural and fixed costs.” Furthermore, he intimated, “We will continue to hire for critical jobs related to the India 2.0 Project.”
According to some insider sources, Renault India has managed to promote about two dozen employees by March 31.
Vankatram Mamillapalle, MD of Renault India spoke to the press about his awareness about employees’ anxiety over salary cuts and job losses, in these times of crisis. That’s the reason why he was able of assuage its employees that no such company-wide decision had been made, via town halls.
Moreover, he stated, “Salary cut or job loss is not the answer to deal with the current crisis. People are my best assets. I would want to retain talent to deliver more when things come to normal. Yes, we will have to cut corners on other costs, but not employees.”
The Indian consumer vehicle market had already shrunk 18% in FY19-20. Sales figures had plummeted to reach the quantity from five years ago. Nonetheless, companies like Kia, Škoda-Volkswagen, Renault, and MG Motor have new product launches lined up to attend to the mobility needs in our country of 130 crore Indians.
These companies which have upcoming investment commitments and new product launches lined up are keen on protecting their ecosystem of dealers, vendors and employees. The reason being that they want to ensure that the value chain is energised and ready to take advantage of the market revival when it eventually happens.
Shanghai Automotive-owned MG Motors, a new entrant into the Indian market, has assured its dealers and employees that their salaries would be maintained.
MG Motor India President, Rajeev Chaba said, “As corporates are busy making worst case scenarios, we have taken a pledge that there will not be a single job cut even in worst case scenario for MG Motor in 2020.”