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SEPTEMBER - 2019
The company also supplies other The entrepreneur is spending sleepless
components to other infrastructure nights not knowing how to continue like
companies, but Ashok Leyland had by this… There are bank liabilities... If
far kept its machines most busy. things continue like this, in four to five
months, the company may well collapse.
With his main customer announcing no-
production days almost 16 days this Company after company is cutting back
month, and many days over the last two on raw materials they buy, unsure of
months, there was no alternative than to orders they will get. Costs are going up as
close down one unit entirely in mid- they no longer purchase materials in
August. bulk. And a few other companies have
decided to cut down on work they were
The tragedy is it took 20 years for the sub-contracting.
company to reach here, but in this
market situation, it is faced with One company used to outsource its
questions of even survival. Today, the production orders to nearly 20-22
building and the machinery is its own smaller companies, since it got orders
and so it is sustaining by keeping them above its capacity. Now it is only giving
on its rolls, but for how long, is a work to four to five companies. At least
question that refuses to go away, every 15 smaller units depending on them
day when the factory is open. have no work today.
The concerned company held meetings At Peenya Industries Association, where
with top executives of Ashok Leyland, over 6,000 of the 10,000-plus MSMEs of
but wasn't given any assurances that Peenya are enrolled as Members, regular
things will improve for at least another brain-storming sessions have been on for
four months. over a month now on how to tackle the
crisis. These MSMEs – most of them
Consider this: In a previous critical involved in machine tools, auto
period, the company managed to ride the components and packaging – have a
recession in 2001 too, but even then it combined annual turnover of Rs 30,000-
had enough work to operate machines plus crore rupees. They employ more than
seven to eight hours daily. Now, it's not 8 lakh people, at least 40 per cent of them
even an hour's work a day. The company women.
has four months' stock but no one is Team PIA have met with top Central
buying. It also supplies to other Ministers like MSME Minister, Sri Nitin
infrastructure engineering companies Gadkari and Finance Minister, Smt.
and construction companies – but even Nirmala Sitharaman. But suggestions of
those are facing a market downturn.
PIA and few other industry bodies on
boosting the manufacturing sector or
In another similar case, a company
making hydraulic sealing systems for all pleas for easier GST norms have mostly
gone in vain. They are bearing the brunt of
kinds of vehicles has suffered losses the economic slump down the line, taking
worth crores of rupees over the last six
months and its plans to import three jobs and livelihoods with them. And those
new machines for a new plant is on hold. in the business warn that what seems like
an economy crisis now won't take long to
In fact, construction of the new plant on
the outskirts of Bengaluru is on hold. become a social problem.
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