Bajaj Auto Managing Director Rajiv Bajaj has appealed to the government to take a middle path as far as the measures taken to battle the COVID-19 crisis in India. Speaking to NDTV, Rajiv Bajaj said that extending the lockdown indefinitely may not be in the best interests to revive and kickstart the auto sector, as well as the economy. Bajaj said that the auto sector was already facing challenges due to several policy measures over the past couple of years which have had a negative impact, and the current coronavirus lockdown has only added to the crisis in the auto sector.
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Bajaj said that there should be a roadmap for developing herd immunity, taken along with testing, which will provide a middle path out of the current complete lockdown. Bajaj questioned for how long the lockdown will be implemented and if that will help combat the coronavirus pandemic in the long term.
"Even today, the common flu kills 6,00,000 people worldwide. So, this flu is not going to go away. You can put different labels on it, but it's going to keep coming back. The question is, unless we develop herd immunity, how are we going to combat it. I think the numbers are going to keep going up for months together. Are we going to stay locked down?" Bajaj said in an interaction with NDTV.
"At least, goods of all kinds, irrespective of whether they are essential or otherwise should be allowed to move. So if that happens, at least a company like ours will be in a somewhat better position. And I would like to sincerely request and believe, that after May 3, the severity should be re-looked at, for a better middle path to the problem," he added.
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Bajaj is India's largest exporter of two-wheelers. Almost 50 per cent of Bajaj Auto's production is exported
Bajaj said that the auto sector was already facing challenges from numerous fronts which have hiked up prices, including increasing mandatory insurance for vehicles for several years, new safety and emission regulations. He said that the auto industry is not facing liquidity crunch, but indirectly pointed to regulations which have made products more expensive for the consumer.
"I think the problem for the auto sector, is over regulation, rather than liquidity crunch, or any such factor. And when I say over regulation, it is over regulation with respect to insurance, safety, and now the emission norms, which has driven up the price of an average two-wheeler in 18 months by 35 per cent. Now, if anybody thinks a price increase of 35 per cent in 18 months is not going to dampen demand, then I don't know what he is talking about," Bajaj said.
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Bajaj Auto's plants across India are shutdown along with other auto manufacturers
Rajiv Bajaj said that no one will lose jobs at Bajaj Auto due to the current lockdown and ensuing loss of productivity. However, workers at Bajaj plants have voluntarily come forward to offer to take pay cuts, he said, adding that he himself, as the Managing Director, had announced not to take any salary, at least, till the period of the current lockdown.
Also Read: Bajaj Auto Workers Agree To 10 Per Cent Pay Cut
"At this moment, we see no reason to sack anyone., there are no job cuts at Bajaj Auto. I maintain that position up until now, till May 3. Of course, nobody can say what will happen if the lockdown is extended indefinitely. As far as I'm concerned, I, as Managing Director of Bajaj Auto will not take any salary, at least till May 3, I will not be paid any salary. As far as my people are concerned, they have come forward and said, at least in a true spirit of partnership, in a sense of mutuality and reciprocity, we would like, voluntarily, to take a wage cut. For example, the unions have suggested, something like 10 per cent, for junior staff and the workmen, so I would imagine, for the middle management and the senior management, a little more. So, the short answer is, we have not decided on anything yet. So, we're still waiting to hear any news about easing of the lockdown," he said.
To a question whether he expected some steps from the government to boost the auto sector, Bajaj said that there should be "specific and sustainable" steps announced which will help the auto sector.To a question about what steps from the government will help revive the economy in general, and the auto sector in particular, Rajiv Bajaj said that services, even if they are non-essential, should be allowed to resume, for the economy to revive.
Also Read: India's Automakers Seek Tax Cut To Boost Demand After Coronavirus Hit
"I would put it this way, keep it simple, keep it specific, and keep it sustainable. More specifically, I would say, please review those three factors, I have mentioned related to insurance, safety and emissions. Anything above that will be more than welcome, let me give you an example what Austria did. Stefan Pierer (KTM CEO) said to me, that without us even asking for it, we don't have anything left to ask of the government. They have now announced that they will reimburse 50 per cent of our employees. From Europe to Canada, it's well known how governments are stepping forward, I think the ideas are there, but somebody has to take action," Bajaj said.
India is under a complete lockdown till May 3, 2020
Rajiv Bajaj said that complete lockdown may not be a practical solution going forward to battle the coronavirus pandemic. While there's no doubt about the number of positive cases and deaths related to the outbreak, Bajaj said that the time has now come to think of a middle path, to get out of the lockdown.
"My contention is that, protect the vulnerables in the red and orange zones, and let the rest of us get on with it. I think that is the middle path that we should always look at. Now, what has happened has happened, but let's ask ourselves whether there's a better way forward," he said.
Speaking about challenges with Bajaj Auto, and the company's manufacturing plants, Rajiv Bajaj said that these manufacturing units are outside city limits, in rural areas. And therefore, he suggested, plants like Bajaj Auto's should be allowed to re-open and resume duties, since there is not so much risk of infection, as these plants are outside the containment zones.
"As far as my own plans are concerned, all plants, whether at Chakan, in Pune, the plant near Aurangabad, and the Pant Nagar plant, all of them are outside the city limits. So, while they may be in the hotspot of Pune, they are outside the city limits, they are not in any containment zone. They are in industrial estates, they are in the rural areas. And most of our people live in the vicinity of the plant, so there's no transportation involved," Bajaj said.
The Bajaj Auto managing director said that while there's a view among the government and bureaucrats that manufacturing plants like Bajaj Auto's should be allowed to reopen and resume work, no one in the government is willing to take a decision like that, in the fear, that such a decision will be blamed on rising number of cases going forward.
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