Renault-Nissan plant starts layoffs – 3000 to be affected

The sailing for Renault-Nissan Automotive India Pvt Ltd. (RNAIPL) has not exactly been smooth in recent times. Apart from a couple of car models, most of them have been not selling well and hence the inventory  has been piling up at both the factory as well as dealership for the past three to four months.

This has prompted Renault-Nissan to undergo a massive downsizing at its car factory off Oragadam that could possibly have an effect on as many as 3000 jobs, according to ETAuto. The company has decided to cut production at the plant by 50 percent, i.e, from 40 cars an hour to 20.

The factory has an inventory 5140 vehicles of the Renault Duster. Also, the recently launched MPV, the Lodgy numbering 4100 are stocked up at the factory. Besides these numbers, the national dealer network have a combined inventory of around 10500 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 produces car brands such as Micra, Duster and Terrano. It was built at an investment of INR 4500 crore and a full ramp up capacity of 4 lakh cars.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.

The company now has its eyes set on the entry level and will bet big on its sub Rs 4-lakh car ,the Kwid, slated for a launch this festive season. An inside source from the factory said, “The company has planned to disengage trainees, casual labour and apprentices, but the other workers will not be affected.” The company has also seen a high turnover in its sales force with over 71 of the 112 employees quitting the company in recent months. 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 department against the company.

In response to ET’s mails about this particular disengagement, a Nissan spokesperson had said: “Renault-Nissan 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.

“