Nashik strike causes production losses of Rs 150 crore to Mahindra's vendors

Ongoing ‘tool down’ strike, waged by the Nashik plant workers of the automotive major Mahindra & Mahindra (M&M) for the past nine working days, have now started affecting around 350 vendors of M&M across the country. The total production losses to Mahindra vendors alone are estimated at Rs. 150 crore during the last seven days.

On the contrary, the auto major M&M itself has reportedly lost the production of 4,000 units in the past nine working days, which is estimated at around Rs. 225 crore. M&M has said it has enough stock in the pipeline of up to 23 days and hence retails to the customers will not be affected. Short-term loss of production can be recouped by refilling the inventory.

M&M’s Nashik plant manufactures utility vehicles Scorpio, Xylo and Bolero. The company also manufacture sedan car ‘Logan’ at this plant in joint venture with French carmaker Renault. The company outsource components for these four vehicles from 350 vendors across the country. Of which, around 100 vendors are in Maharashtra, including 60 in Nashik district.

Productions of these 350 vendors have been affected by 20 per cent to 100 per cent due to intense labour strike in M&M’s Nashik plant. Daily supply of components to Mahindra’s Nashik plant (by its vendors) is estimated at around Rs. 22 crore. So far, total production losses to these vendors in the past seven working days are estimated at around Rs. 150 crore, reliable sources told Business Standard.

The vendors, which have been badly affected include Lear Automotive India Pvt Ltd, JBM Auto, Mungi Brothers, Sharda Motors, Supreme Auto Shell, Alf Engineering, Mahindra Ugine Steel Co Ltd, Mahindra Group’s Igatpuri engine plant etc.

"Production at Nashik plant of Lear Automotive India Pvt Ltd, which supplies 500 seats daily to M&M, has been affected 100 per cent. The company has stopped production at its Nashik plant from 6th May 2009, causing the total production loss of Rs. 6.40 crore (Rs. 80 lakh per day loss) in last 8 days. Lear has 277 employees at its Nashik plant, including 150 contract workers, the company's top official, who did not want to be identified told Business Standard.

M&M outsource engines from its Igatpuri-based (in Nashik district) engine plant for utility vehicles Scorpio, Xylo and Bolero. The Igatpuri plant has reduced production by 425 engines a day due to labour strike in Mahindra’s Nashik plant.

Around 80 per cent production in Nashik plant of Mahindra Ugine Steel Company Ltd (MUSCO), which is engaged in the manufacturing of steel products, including tools, alloys, special steel and pressed sheet metal components, have been affected by 80 per cent.

The production at Nashik plant of JBM Auto, which manufactures sheetmetals for Mahindra’s utility vehicles, has been affected by 100 per cent. The company has reportedly stopped manufacturing at its Nashik plant.

Mahindra’s Nashik facility manufactures 486 utility vehicles daily- 240 utility vehicles, ‘Scorpio’ & ‘Xylo’ on the same assembly line, 180 Bolero utility vehicles and 66 sedan car ‘Logan’. The Nashik plant has 4450 employees, including 2750 permanent employees, 1200 temporary employees and 500 apprentices.