Saving Jobs More Important Than Playing to Dalal St: Rajiv Bajaj
“Salaries for Bajaj Auto employees are just 4 % of sales. Getting rid of 10 % of my people would save only 0.4 %.”
At a time when the auto industry is slashing production and has laid of nearly 3.5 lakh temporary jobs, the MD of Bajaj Auto, Rajiv Bajaj, has said that the industry is responsible for most of the slowdown.
“How are we going to build a sense of ownership in our own people if we can’t even cushion a shock for 6-12 months and that too a shock of our own making”, he told CNBC-TV18 interview.
Industry Needs to Look at Shortcomings
He stressed that companies should not be laying off employees and resorting to “fear mongering” by cutting jobs since employees salaries account for a minor percent of sales.
“Salaries for Bajaj Auto employees are just four percent of sales. Getting rid of 10 percent of my people would save only 0.4 percent. Is saving 0.4 percent in EBITDA and playing to the galleries on Dalal Street more important than thousands of jobs?” he said, in an interview to CNBC-TV18.
Bajaj added that a five to seven percent drop in retail sales is not to be viewed as a crisis and that the industry needs to look at its weaknesses and shortcomings before asking the government for a stimulus.
Products Mediocre, Not Worth Exporting
According to him, the drop in retail sales would have hurt less if companies had invested in global markets in the last 10-15 years. He also said that companies had been unable to export their products because they were mediocre, mainly because they tried to make everything.
“When you will make scooters, and bikes and cars and jeeps and SUVs and trucks and buses and everything under the sun, you are obviously not going to be world-class at anything,” he told CNBC-TV18.
According to Bajaj, the auto industry was now correcting stocks after having built up an inventory in September 2018. Bajaj Auto too will be focussing on inventory correction and would not push up wholesale numbers this festive season, he said.
Acknowledging that it is a difficult time for the sector, Bajaj said that the government should not make it worse by raising registration fees.
(With inputs from CNBC-TV18.)
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