iNDICA NEWS BUREAU-
Due to pandemic-led delayed projects and a legal dispute Indian automaker, Mahindra & Mahindra has cut more than half of the workforce at its North American unit, according to sources.
India’s largest SUV manufacturer has a long-held desire to enter the competitive yet lucrative U.S. market. However, the timing has not been going well for the company.
Mahindra Automotive North America’s (MANA) declined to specify how many of its 500 employees have been affected. It previously has said roughly 100 manufacturing workers in its Oakland County plant had been furloughed when it halted production of its Roxor vehicle in August. Positions include engineers and manufacturing jobs at its plant in Detroit, as well as sales executives.
The cuts come as Mahindra reviews its businesses in a drive to conserve capital and retain only those that make money or have the potential to be profitable.
MANA said in a statement it had furloughed some staff and laid off others due to the pandemic and an International Trade Commission lawsuit which led to an August “cease and desist” order for the Roxor business. It did not provide figures.
The US International Trade Commission, however, gave relief to Mahindra last month when it determined the redesign of the off-road Roxor does not infringe upon the intellectual property of Fiat Chrysler Automotive NV’s Jeep Wrangler.
Mahindra and Fiat Chrysler Automobiles (FCA) are in a protracted legal battle over an intellectual property infringement case that has prevented the Indian automaker from selling its Roxor vehicle in the United States.
“This forced us to halt production and furlough our manufacturing team and some additional people across several functions, including the Roxor sales team,” the company said.
However, last month, the company won a favorable ruling in its lawsuit against FCA, paving the way for it to begin selling the Roxor again.
It now expects to recall a large group of employees, it said in the statement.
“ROXOR, for all intents and purposes, is still a startup,” Mahindra said in a statement about the vehicle that launched in 2018.
“Getting the unexpected one-two punch of Covid-19 and an initial ITC opinion that forced a halt in production that has lasted almost six months, has been the greatest challenge most of us have ever faced and it’s forced us to take some difficult actions.
“With the ITC matter finally behind us, we’re excited about the prospect of being able to recall a large group of employees.”
The company is hopeful to return to full production by the end of 2021, though it has not said when production will resume at the plant located down Interstate 75 from FCA’s North American headquarters.
The cuts come as Mahindra reviews the organization to conserve cash and continue operations that make money or it expects to be profitable. Last month, parent Mahindra and Ford Motor Co. blamed the pandemic for having to scrap plans for a joint venture in India.
This month, Mahindra’s information technology services division began laying off 81 employees in Lansing, according to a notice filed with the state of Michigan.
Last summer, Mahindra also withdrew its bid for a contract with the US Post Service. The automaker in 2019 had signed a non-binding agreement to acquire a 364-site at General Motors Co.’s former Buick City in Flint for an assembly plant, but that has not yet occurred.
Mahindra also has a significant presence in the U.S. as a distributor of tractors and utility vehicles. The company has been in the Detroit area since 2013 with a technical center in Troy.
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