KARACHI: Sellers have shown doors to thousands of daily salaried workers, external employees and contract workers from July to date after a massive decrease in sales in the automotive sector in general.
The president of the Pakistani Association of Automobile Parts and Accessories Manufacturer (Paapam), Captain (retired), Mohammad Akram, said Dawn on Saturday he had received comments from the 400 members of the association across the country on the layoffs of around 40,000 people in view of the sharp decline in the acquisition of parts by the car and other car assemblers after a massive fall about the sales.
He said there are about 1,500-2,000 other small and medium-sized sellers that supply parts to the aftermarket. “I think they are not very affected since the aftermarket is becoming quite strong. We [Paapam’s] 400 suppliers supply parts to car assemblers exclusively.
"I see more unemployment in case the slowdown in sales continues in the next two or three months," Akram feared, adding that the ax can also fall on permanent workers in the next phase of layoffs. He said that 1TFY20 had already finished in red for the entire automotive sector, while sales will likely remain depressed until December.
On the increase in vehicle prices, especially cars, he cited the low location in vehicles as one of the main reasons. "What assemblers claim to achieve a high location is wrong, I can prove it," he said while adding that a greater location would definitely have prevented a frequent increase in car prices as the rupee fell against the dollar.
Akram also complained that assemblers have been constantly increasing vehicle prices, but they hesitate to convey the price increase to suppliers for the purchase of parts.
The former president of Paapam, Munir Bana, said he had laid off up to 300 employees (daily salaried workers, contract workers, supervisors, etc.) from July to date. He added that the contracts of those employees who were over 60 and who were already in extension were not renewed. "I still have 1,000 workers and employees left," he added.
He said that after closing the second shift, his company is now observing four Saturdays as holidays instead of two. In addition, due to the lack of workload, the company has also stopped giving overtime.
A Balochistan Wheels Ltd official said the company has laid off 300 salaried workers, workers, contract and permanent employees. He said the company has been observing days without production from October 11 to 24.
"Many vendors cannot pay wages or delay payments to their workers and employees due to cash flow problems," he said, adding that around 7,000-8,000 workers and employees had lost their jobs in the Karachi sales industries and Lahore
Contrary to this, Indus Motor Company (IMC), the manufacturer of Toyota vehicles, has announced that there will be no layoffs of employees despite the slowdown in production. The IMC resumed the production of cars with a capacity of 50 percent from October 1 after closing the plant during the last 15 days of September.
The rupee depreciated by around 31.6 percent in the last 12 months, but "by not firing workers and employees, we are absorbing this financial crisis," said the IMC representative.
Car assemblers have been fighting for the depreciation of the rupee, the reduction in automobile financing, the imposition of federal excise duties of 2.5-7.5pc, additional customs duties of 7pc and the additional sales tax of 3pc on all imports.
Posted on Dawn, October 20, 2019
Source: https://www.dawn.com/news/1511878/thousands-of-workers-sent-home-amid-plummeting-sales-claim-auto-vendors