In September this year, Ford announced the closure of its plant in Tamil Nadu, rendering nearly 4,000 regular workers and about 40,000 contract/temporary workers jobless. 75 big companies and more than 200 small and medium companies who are involved in the production and supply of spare parts directly or indirectly to Ford are vulnerable to being shut down.
All the major automobile manufacturing companies have laid off tens of thousands of workers, in the past few months. In Tamil Nadu alone, nearly 80,000 to 1 lakh workers have lost their jobs in the last 11 months, according to various trade union leaders.
Thousands of workers, mostly on contract, have lost their jobs as a result of large-scale layoffs in the automobile manufacturing zones in Sriperumbudur, Oragadam, Maraimalai Nagar and Thiruvallur on the outskirts of Chennai.
Chennai, the capital of Tamil Nadu, is one of India’s biggest automobile manufacturing centres, often referred to as “Asia’s Detroit”, after the US city that serves as that country’s centre for the automobile industry. The state of Tamil Nadu is among the top 10 automobile hubs in the world. It is estimated to be producing nearly 13 lakh cars a year — 27 per cent more than the total number of cars on the streets of a city like Mumbai. According to industry estimates, it produces 3 cars every minute, 1 truck every two minutes, and a motorcycle every six seconds. Tamil Nadu accounts for 35 per cent of India’s auto-component production, and nearly 45 per cent of the country’s motor vehicle exports.
As part of their expansion into Asian markets, some of the biggest automobile manufacturing companies such as BMW, Ashok Leyland, Ford, Mahindra and Mahindra, Hindustan Motors, Integral Coach Factory, Mitsubishi and Royal Enfield and many others have set up manufacturing facilities in Tamil Nadu.
The ongoing economic crisis, the consequences of demonetization and GST and the Covid-19 pandemic, the growing loss of livelihood and wages, the tightening of loan conditions by the non-banking finance companies (NBFCs), all these have resulted in a big drop in the sales of automobiles, with sales in July this year reported to have fallen by nearly 19% — lowest in the past two decades.
Data released by the Society of Indian Automobile manufacturers last month showed automobile sales contracted in August by a record 24% — the sharpest fall recorded since 1997-98 when the organisation first started collecting these figures. Passenger vehicle sales alone have contracted by 32%, registering a fall for the tenth consecutive month.
According to reports, many companies such as Tata Motors, Mahindra and Mahindra, Maruti Suzuki, Toyota Kirloskar, Bosch, and Wabco have announced the closure of their plants for a period between 8 and 20 days, severely affecting the workers’ incomes.
A large number of small-scale industries, manufacturing auto parts, have been forced to either close down or cut down their workforce. For example, in Ambattur Industrial Estate in Chennai, there are more than 30,000 small scale companies and nearly 80 per cent of them employ contract workers. Many of them have either cut down their staff by 80 per cent or just closed down due to lack of orders. This has led to even more workers becoming unemployed.
Taken together, nearly 14 lakh people are estimated to be losing their jobs, the bulk of whom are contract workers. This does not include the impact on the transport sector, which is largely an informal sector, in which employment or lack of it is mostly undocumented in official statistics.
The contract workers who are still employed are forced to work under severely exploitative conditions as well as threats and intimidation. They are constantly under threat of losing their jobs. They are thrown out at the slightest pretext, including for taking sick-leave. Officers appointed by the company management stand guard at the factory gates and at the buses in which the workers travel to work, making sure that no worker talks to any person outside the company, including media persons or trade union activists. They are threatened that they will lose their jobs if they talk about their conditions to anyone outside.
The daily-wage workers are among the worst-affected. Hundreds of trainees have been laid off. Workers have been asked to stay at home and come for work to the factory only when called. Workers’ wages have been deducted for the days they have been asked not to come to work.
All forms of protest are banned. The workers whose contracts have been terminated are constantly threatened that if they protest then their contract will not be resumed when manufacturing orders and sales pick up.
The condition of the automobile workers in Tamil Nadu is yet another example of the extreme insecurity of livelihood that workers face under the present capitalist system, headed by the biggest monopoly capitalists. The inherent contradictions within the capitalist system cause it to go from crisis to crisis. During each crisis, the big monopoly capitalist houses engage in large-scale retrenchment of workers and severe exploitation and wage cuts for the reduced workforce, in order to safeguard their profits. The Indian state, which works to ensure the highest rate of profit for the Indian and foreign monopoly capitalists, is utterly incapable of ensuring security of livelihood and dignified living conditions for the workers.