Chennai auto companies keep workers close to units; lodge them in halls, colleges

Mumbai: Around the automobile manufacturing units on the outskirts of Chennai, there is a sudden demand for marriage halls, hostels, college buildings and resorts that have mostly been closed since the start of the pandemic.
Automakers such as Hyundai Motor, TVS Motor, Renault-Nissan, Royal Enfield and their component suppliers are hiring these facilities to temporarily house their employees. These companies are trying to ensure continuity in production, even as the Tamil Nadu government has imposed a fresh round of lockdown with stringent movement restrictions in and around Chennai, a major Covid-19 hotspot.

Hyundai Motor India has tied up with three colleges and universities in the vicinity of its factory at Sriperumbudur to use their premises, director for production Ganesh Mani S said.

“We have managed to create accommodation for about 1,200 workers in nearby areas to ensure continuity in production. We have also helped our vendors in creating this temporary set up within the premises or nearby hostels,” he said.

The manufacturer of the Creta SUV and i20 hatchback has reached half its monthly average pre-Covid production, Mani said, adding: “With sustained demand, we hope to ramp up further.”

He said Hyundai along with its vendors had employed more than 1.4 lakh people directly and another 4.5 lakh indirectly.

In the month of May, Hyundai Motor India produced about 12500 cars, which was better in the month of June, despite a week-long shutdown on account of re-engineering a manufacturing line to accommodate the new generation i20.

Hyundai’s French-Japanese rival Renault-Nissan has put up employees mostly at hotels, while local two-and three-wheeler manufacturer TVS Motor has got accommodation for workers at nearby marriage halls.

Factories in this manufacturing belt produce some 6 million vehicles a year, about a quarter of the country’s output in fiscal 2020. Three quarters of these vehicles are two-wheelers, while 13.6% is passenger vehicles and the rest is mostly commercial vehicles. The companies don’t want any disruption to production, as that would mean missing out on a pent-up demand that the market is witnessing after the nationwide lockdown.

While the companies are keeping the critical workforce close to the factories, they say it won’t be sustainable for long.

Renault India managing director Venkatram Mamillapalle is hoping that the current round of restrictions in Chennai and the nearby districts that started on the June 18 would conclude on July 6.

"We have started producing from Tuesday, as there is a decent order flow in June which we need to serve. It is clear that the lockdown needs to be lifted and the local administration is aware of that,” he said. “The temporary accommodation system is not fruitful.”

Movement of people between Chennai, where most of the auto sector employees live, and Kanchipuram, where most of the automakers and their vendors have their facilities, has become a problem due to the travel restrictions. Several gram sabhas in the vicinity of the facilities have also banned the entry of people from containment areas.

Industry executives said production in the region had reached 30-40% of the pre-Covid level, but was still lower compared with the Northern region and that they were unable to ramp up due to the continuing restrictions.

People in the know said Royal Enfield was facing problems in increasing production, as a number of its vendors were unable to supply its components due to the movement restrictions around Chennai.

A Royal Enfield spokesperson said the company had resumed operations in a safe and gradual manner on May 6, at all its three manufacturing facilities.

Apollo Tyres spokesperson said that they made a stay arrangement near our Chennai facility, where food and cleaning was being taken care of by the plant team.