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Old 22nd January 2014, 22:48   #1
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Default Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

The December 2013 Indian car sales thread gives the real picture of our auto industry, and Tata's graph, for that matter was almost touching the -50% YoY, only next to the even worse HM.

Today, ET has reported that Tata Motors is to offer a voluntary retirement scheme(VRS) to a section of employees as it looks at rationalizing costs.

Quote from the news article;
Quote:
"The industry as well as India is going through a rather protracted downturn. Therefore, there are lots of things out there to enable us, ensure our structure is suitable. Voluntary retirement scheme (VRS) allows those people to move on with our support," Tata Motors Managing Director Karl Slym.

Asked how many employees would be offered the VRS, he said it would be a "very minor" number.
The YoY sales chart and the TATA figures chart from our Dec 2013 sales analysis thread (December 2013 : Indian Car Sales Figures & Analysis);
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Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?-tata.jpg

Source: http://economictimes.indiatimes.com/...w/29207249.cms

Last edited by sarathlal : 22nd January 2014 at 23:01.
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Old 22nd January 2014, 22:58   #2
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Default Re: Tata motors to offer VRS, a direct impact of auto industry sluggishness

For a moment, I thought they were offering a sporty model, like the Octavia vRs!

Guess that is what is foremost amongst us auto enthusiasts.

Coming back to the topic, this seems to be a step towards the grim future, given the sliding sales across all manufacturers. It wont be long before others follow suit. Let us see how the future unfolds.
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Old 22nd January 2014, 23:15   #3
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

From the lethargic, clueless and reactionary way TML has been acting for a while, there appears to be a lot of dead wood in the higher rungs, and I hope it's them who are being given the boot. If only a few people will he sent away, and this is going to have a major impact on cost, It has to be them!

Good luck to Karl Slym. If you can't get the elephants to dance, put them out to pasture and get new steeds!

Last edited by greenhorn : 22nd January 2014 at 23:17.
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Old 22nd January 2014, 23:17   #4
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Default

A typical understated comment. It could mean as high as 10% of the workforce.

Important to note that once an employee is let go, they'd only come back (if ever) with a chip on their shoulder.

Low sales proved to be a very compelling for them to do this. They have quite a few launches this year. I guessed they'd wait abit.

Last edited by GrammarNazi : 22nd January 2014 at 23:22.
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Old 22nd January 2014, 23:34   #5
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Rather than blaming the Industry downturn, Tata Motors should blame themselves.

- Poor quality of cars, random parts failure, frequent service center visits

- Chronic ill organized service centers, poor service is a constant

- Outdated designs and poor nomenclature. Why use the name "Indica", "Indigo" forever? Even a kid will know an Indica means Taxi.

- Poor understanding of market pulse. XUV 500 vs Storme. Just no comparison.

On all the above, nothing has even marginally improved for a long long time.

When you can't even do one basic thing right, how can you think of sustaining in the market, Tata?

And, you have put the blame on Industry down turn.

Sad, for a company of your legacy!
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Old 22nd January 2014, 23:36   #6
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

TML need to hire high quality young talents from top schools in all ranks. There are so many old timers in TML who are not ready or willing to adapt to the changes happening around. In developed countries a company could lay off people and hire young talents to keep the balance. But in a country like India, the only option is VRS. Hope some of the seniors will avail this option. Carl should have done this as soon as he took over, rather than an year later.
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Old 22nd January 2014, 23:36   #7
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Quote:
Originally Posted by vnabhi View Post
For a moment, I thought they were offering a sporty model, like the Octavia vRs!

Guess that is what is foremost amongst us auto enthusiasts.

.
Same here

But it is fairer compared to the practice of layoffs. Else they can also try moving some of the skilled personnel to different departments. They are doing quite well in the CV area. Hence they can allocate more brains towards that sector. I did not expect this and thought they were quite optimistic about the future product line, especially after their HorizonNext programme.
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Old 23rd January 2014, 07:51   #8
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Its high time!! Finally TML has woken up to the fact that most of the old timers are too set in their bureaucratic ways, to adapt and change. If they are careful now, they can get rid of a lot of dead wood in the product development, marketing and quality control department. Ideally they must follow the Maruti way and hire/replace the existing labour with contract labour, as to not have unionized workers.
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Old 23rd January 2014, 09:13   #9
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Tata should make major changes in how they deal with vendors and insist on higher quality standards and pay more for components until they get their game up in the market. All critical components should be made to higher tolerance and maybe cost savings can come from thinner sheet metal but electronics and electricals should have far lower tolerance and suspension also should be high-quality international vendor like borbet or Koni.

Only something like this can restablish Tata brand in market. Else on current track they will have no brand value left. Usually these things can happen only if someone is responsible for it and given a free hand to implement such changes. If left to old-timers set in their ways, they will still penny-pinch on components in the search to cut down on overheads and whip up bottomline but at the same time slowly grind down brand value to nought.

And such changes can only be bought about at a very senior level and not newly inducted MBAs.
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Old 23rd January 2014, 09:33   #10
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

I hope they really target the un-productive elements with this move and offer them to move in a "good" way out of the company and use this opportunity to bridge gaps and improve the quality of human resources too.
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Old 23rd January 2014, 11:13   #11
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Tata works like a pseudo Govt. Organization.

It is high time that they do a HR churn, skim out unproductive elements and go a complete personnel restructuring.

Followed by a complete Product restructuring.

This insane and uninspiring gimmicks like Horizonext and stuff will not work.

The products being offered needs to be completely revamped.

Get fresh new talents and a completely new design team, focus on customer satisfaction and strenthen the dealer network.
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Old 23rd January 2014, 12:15   #12
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Laying off people in industry full of worker unions is not easy. In IT its so easy that one fine day you would find yourself standing outside the building and cursing your stars for being thrown out.

VRS is kind of safest alternative to politely asking people to make a move. It might as well turn out good for employees nearing retirement.

High time they came out with an appealing design and fresh and good looking interiors on their cars. Why so obsession with the ugly India/Indigo design language. Storm interiors still compete with trucks and buses rather than XUV. I hope Karl would be able to turn tables for this marquee.
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Old 23rd January 2014, 13:28   #13
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Quote:
Originally Posted by vnabhi View Post
For a moment, I thought they were offering a sporty model, like the Octavia vRs!
.
Me too

Quote:
Originally Posted by swiftnfurious View Post
I hope they really target the un-productive elements with this move and offer them to move in a "good" way out of the company and use this opportunity to bridge gaps and improve the quality of human resources too.
True, so, this looks like the HorizoNext is really working out even in Personnel - Improving quality ?
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Old 23rd January 2014, 14:37   #14
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

A very good move to get rid of yesterdays' talents, who still live in yesterdays.

This might be a little off-topic, but still, let me tell you what I observed at another Tata company (not Motors) when I went to their office for an SAP implementation a couple of years ago.

The building houses more than a thousand people. From what I could see, 90% of the employees were 45+. And we had to interact with so many people, who were twice our age. They were still learning to use SAP, and we could see that they were so use do such tools as Excel and calculator, they found it difficult to understand how latest technologies work.

Add to that, their personal egos come into picture when their bosses are younger than them.

I am pretty sure, the case is the same even in Tata Motors. So top management has take the right decision: Get rid of lower leve maangement that cannot climb up the ladder, and get fresh talent that can see the future.
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Old 23rd January 2014, 17:22   #15
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Default re: Tata Motors to offer voluntary retirement, a direct impact of industry sluggishness?

Like many others here, i thought we might see a VRs from tata, going by the recent turbo petrol engine launch. But they are in the sea at the moment, i don't see some effort to try and utilize some of the talent out there and this has been shown on the YoY charts as a deficit in profit for them. I just hope that new blood can bring in the change that the existing crew couldn't. Good luck to them.

P.S: I haven't seen them utilize their JLR design team for even design cues. My question is why? Would love if someone could explain. a nicely designed hatchback would sell here for sure.
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