Mahindra lays off two-thirds of staff at its North American subsidiary

Firm attributes move to pandemic and legal spat with Fiat Chrysler, says it is in line with group’s strategy to re-think capital allocation and drive efficiency

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Mahindra & Mahindra | Mahindra Group | United States

Mahindra Automotive North America (MANA), the Detroit based subsidiary of the Mahindra Group, has retrenched more than half of its employees, the Reuters reported on Wednesday cited sources familiar with the matter. The move comes amid the Mumbai-headquartered firm’s review of all its international businesses and scaling down or shuttering ventures that are underperforming.

“Hundreds of workers” had been laid off since mid-2020 as part of a restructuring, and that the cuts were as high as two-thirds of Mahindra Automotive North America’s (MANA) total staffing, it said. It attributed the lay-offs to the pandemic and an ongoing legal tussle with Fiat Chrysler Automotive (FCA). The positions include engineers and manufacturing jobs at its plant in Detroit that produces the off-road vehicle Roxor, as well as sales executives.

A Mahindra group spokesperson, said the MANA has “combined some of the job roles and has taken the most difficult decision to reduce the resultant redundant job roles” without specifying the number of people who have been asked to leave. The decision is a fall-out of the company’s decision to not bid for the USPS Next Generation Delivery Vehicle programme and de-prioritization of some of the non-core work, the company spokesperson added.

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The job cuts come as Mahindra re-structures its international subsidiaries in a bid to conserve capital and retain only those that make money or have the potential to be profitable. Earlier this month, it snapped its joint venture with Ford Motor Co citing the pandemic and the changed business environment. It has also put its Korean subsidiary, Ssangyong Motor Co on the block and continues to review several other businesses closely.

The spokesperson added that the Detroit centre “will continue the future-ready work on the Born Electric platforms.” It is also preparing for the launch of the New Roxor 2021, for which it will continue to retain as well as bring in “new and relevant skilled talent.”

Mahindra and FCA were in a protracted legal battle over an intellectual property infringement case which prevented the former from selling its Roxor vehicle in the United States. “This forced the company to halt production and furlough its manufacturing team and some additional people across several functions, including the Roxor sales team, the spokesperson told Reuters. Last month, the company won a favourable ruling in its lawsuit against FCA, paving the way for it to begin selling the Roxor again.

Meanwhile, the design and engineering work on a new Vehicle code named Z101 is now completed and is in the final stage of its India launch, the spokesperson said.

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