No plan to reduce headcount due to slowdown: Tata Motors

PTI, Dec 15, 2019, 2:21 PM IST

New Delhi: Tata Motors is not looking to reduce workforce due to the ongoing slowdown in the domestic market, as it expects things to get better amid a wave of new products lined up for the launch over the next few months, a top company official has said.

According to its website, the automobile major currently employs about 83,000 persons with presence across commercial and passenger vehicles.

“We do not have such kind of plan,” Tata Motors Chief Executive Officer and Managing Director Guenter Butschek told PTI when asked if the company was looking at rationalizing its workforce owing to a prolonged downturn in the domestic automobile industry.

He added that if the company would have liked to take such a step then it would have taken it already.

“We are now for 12 months in crisis. If I would have liked to pull the trigger, I would have done it earlier,” Butschek said.

The company is now in the midst of new product launches that include Altroz, Nexon EV and Gravitas SUV over the next few months and there is also the transition to BS-VI norms, he added.

“I am convinced that whatever the economy is going to do, we are well-positioned in order to outperform the market…since the entire product range is set on a different cost base, our baseline profitability is significantly better than any given point of time before. So, I am pretty positive at this time,” Butschek said.

He added that the company is taking all necessary steps in the commercial vehicle (CV) space, which continues to be its backbone in terms of revenues, to beat the current situation.

Butschek added that the company continues to do well in the CV space and that gives the company a great level of confidence.

“We have the right kind of products, our dealer network is firing and at the moment we think that we can actually surf the wave,” he noted.

The company has all kinds of mechanisms in place including cost optimization and quality control measures, to get to the next level, Butschek said.

“There is no need at this point in time (for workforce rationalization) because I need the capacity anyway back on the floor the time market is going to increase,” he added.

He, however, admitted that he has never seen such a kind of volatility in the market in his over 30 years of career so far.

“We need to carefully watch, need to stay flexible and agile and gain a better understanding…whatever we currently see is much more structural in nature then just cyclical…this combination makes the future unpredictable,” Butschek said.

During the July-September quarter, Tata Motors’ standalone net sales witnessed a drop of 44 percent from a year earlier, while it plunged to a net loss of Rs 1,281.97 crore from a year-earlier profit of Rs 109.14 crore.

Elaborating on the passenger vehicle business, he said the company is bullish on the future prospects as it gears up to drive the first vehicle based on its all-new Alfa platform next month.

The company is set to make a foray into the premium compact hatchback segment with Altroz in January.

The auto major aims to curtail development cost for new models as the new architecture could be underpinned in all kinds of body styles, including MPS, sedans and sports utility vehicles (SUVs).

With the Alfa platform coming and Omega architecture already in play (Harrier), the company expects to build in economies of scale and achieve commonality in products, thus reducing overheads in research and development in the coming years.

“It is the beginning of a larger journey for us with much greater play as 12 top heads could be developed on these two architectures,” Butschek said.

The company earlier used to have a total of six platforms earlier with no common elements in between, he added.

“It means we are now set to get into a powerplay of new product launches in the years to come. We are going to spread our wings over new segments in a shorter period of time in order to spread market cover which is not even 60 percent of the total market,” Butschek said.

The company is getting into a differentiated play addressing various segments, sub-segments and at the same time getting into 90 percent of the market in a couple of years, he added.

“This combination (Alfa, Omega) is a unique recipe, we have commonality, we build scale while at the same time also actually get a larger addressable market. What is the result? Profitable growth and in the end, it is going to cash accreditive business,” Butschek said.