 Hello and welcome to NewsClick. Recently the Ford Motorist has announced the closure of its plans in India, leading to a lot of discussions in the automobile sector and in the economical sector. To discuss more about the impacts, short term and both long term, we have with us Mr Raghunandar of the Consortium of Indian Association. Welcome sir. To begin with, Ford has announced the closure. What actually led to the closure of Ford plants in India and what are the impacts of the closure on the MSMEs and around Chennai? The Ford closure has been talked as a main topic point of many industrial activities in the last four weeks in India, especially in South. Various people analysed the reasons for Ford exit. There are some sort of people who said the Ford models are very expensive, the Ford cars are not made for India, Ford cars are lagging behind the other super stick technologies which has come in the automobile sector. Everybody started blaming Ford for the reasons of their setbacks. That's not actually true. If you really take the passenger cars as a market in India, the last four years, the entire automobile sector has been going through their down times. One after the other, they have been facing challenges and the problems at the issues. Some are policy driven, some are market driven, some are supply chain management driven, some are COVID driven and some are financial constraints of the people driven. All this added up to the Ford exit decision quickly from this country and Ford is not the first to go. Before Ford, there have been three automobile companies which have already exited India and the Ford is the next to fall in line. And Ford has not been in India for a few years. Ford has been in India for a few decades. Ford has not come just with few hundreds of crores as an investment. Ford has pumped in a couple of billions of dollars into the organisation. Ford has just not looked after themselves. The Ford looked after this social environment and the ecosystem around us. And let me explain to you Nilambaram, generally in an automobile sector, we divide the sector into two-wheeler manufacturer, three-wheeler manufacturer, four-wheeler manufacturer, multi-axle manufacturers, bus manufacturers, bodybuilders and yet moving equipments and road construction equipments. These are all heavy vehicles factory. All this will fall under the category of automobile sector. And every passenger car manufacturer for every one direct employee there is a four indirect employee and there is two gig workers. I'm sure your readers and the people who listen to this will know what is gig working. The gig working is the people who work paid by the services they render, not as a monthly service provider, but they are paid by the services they render. And so every one direct worker, six indirect people will lose their livelihood. And we further can categorise the people as an employer loss and the employee loss. So if you take Ford for that matter, you have 4,000 employees under control of Ford has made 16,000 indirect loss of revenue for many people. And if you take the companies which are dependent on them, again you break it down into four people, four types of people who are dependent on them. There are completely 100% ancillary units who depend only on Ford supplies. There are people who look at Ford as one of the suppliers for their business needs. And the Ford's offtake can be 30%, 35% of their turnovers. Then there are third kind of people who render services because Ford is existence. It can be a canteen runner, it can be a hotel in and around Ford. It can be restaurants in and around Ford. It can be dealers, distributors and those kind of transporters of the vehicle. Those kind of people are indirectly service providers. Then there is a Ford one who are called as suppliers to Ford, the traders to the Ford. So if you take these four types of categories, the first type of category which is largely belonging to micro entrepreneurs, they are the worst hit because of the Ford's exit. We estimate about 2700 micro entrepreneurs who would be solely dependent on Ford's survival. Now they have lost their bread and butter. They have taken loans from the banks and they have invested on the machinery, they have invested on the stocks, they have invested on the people and now their livelihood is completely lost and eroded. We need to look at them separate categories. Then the second category of people where the Ford is only one third turnover giver. Then what happened if the turnover comes down by one third? Already the COVID has destroyed their market shares and then the whole organization will get into red. They may not get into closure but then it is an amber sign quickly moving to the red sign for their survival. The traders obviously will have to migrate themselves from the location where they are nearer to Ford for their survival or look at other opportunities for them to survive. So the impact of the Ford in a very broad guidelines is about 16000 people losing their livelihood and about 4000 enterprises losing their survival. This is the impact of just one company. Now you can imagine the kind of the automobile sector where it is going now. What will be the huge impact which we will carry with us from now? While answering you said about the policy driven issues leading to the closure of different automobile companies including Ford. With everybody talking about the electric vehicles and the governments thinking about the options of bringing in investments, will it end with Ford or will other companies also join Ford in closing down their plans in India? Excellent question Milam Bhavani. This is exactly where the concern lies. What have we done to save the auto sector from its fall? Just go back for four years and see yourself. First the government of India announced the rule of the Mark IV vehicles to come. They came very suddenly and said from March, Mark IV only will be allowed. Then what happened at that time was those vehicles which are produced as Mark III were stuck in the market. There were no buyers. Then came the Mark VI only will be allowed. Yes on one side you do have an emission control and emission miles and things like that. We need to be very controlled about the pollution control but how we do it matters. And without giving them time to liquidate their stock, without giving them to be prepared for the shocks, without telling them and adequate steps before you follow. See after all when you jump even at four feet height you will take precautions before jumping. And when the government makes a statement that from March only Mark VI vehicles will be allowed and that too they make it in the month of December then it makes the people neither buy the Mark VI nor buy the Mark IV what is available in the market. So this was how the dullness started. The second one was you know about five years back and ten years back people were buying the diesel vehicles because of its consumption different cost savings. Even though they pay initially one lakh more they would save on the consumption because both of them were almost half the prices. Today that is not the scenario. The petrol and the diesel are almost in far with each other and both of them are nearing or crossing hundred. So why would people buy a diesel car now when there is a petrol car is as equal into the same fuel consumption and at the same lesser price available. So when you look at the automobile manufacturer the money what they sunk into the diesel cars became a liability for them. Then there was a third one the GST collection. The taxation on the vehicle is close to almost about forty-seven to fifty-two percent depending upon the people's way of working. In every car that is sold in this country fifty-two percent goes to the government. Is it affordable? Look at that when the market is tough when you look at price reduction each stakeholder must give away what they have in their hand. The government was rigid in saying I want my fifty-two percent whether you make your profit or not whether you sell or not. So we never cared for them. Then there was a fourth one that we came up with a sudden impact of road tax and then there was a case going on with the insurance being taken for five-year insurance bumper to bumper insurance that thankfully it got stale. But then the toll flares are becoming very high for this country to afford a passenger. So you go from here to Bangalore you end up paying 1000 rupees on a toll on one side and 1000 rupees on the other side which is not fair. So the people started not using the vehicles. And then suddenly you know when things were looking little better the government came up with the electric vehicle policy in a very big way. Now are we ready for electric vehicles? You tell me Nila, where are we ready? We are still having a problem with the charging stations across. We don't have an infrastructure to charge stations. We don't have the technology. We don't have the battery manufacturing capabilities. It has become a bus word to talk about EV vehicles, EV vehicles, EV vehicles. But then who will be impacted because of that? The normal automobile sector, if you take a car for that matter in a normal car it takes about 5000 components to assemble. Whereas in a EV vehicle it takes only 500 components to assemble. So the number of labour requirements or the staffing requirement will be largely entirely different. So this is all what the government did. Instead of assisting the automobile sector to stand on its feet when they are falling the government pressed the accelerator and they said they are falling faster. And we failed. A stitch in time would have saved mine. And we allowed nine holes to come. And four is just only the beginning. And I'm sure next to the four the impact will be on the two wheeler market because the EV two wheeler market is growing or at least expected to grow in the market. So why would people normal petrol two wheelers would be sold in the market? So these are all the impacts which we are talking and the last month's sales figure of the passenger cars has drastically improved. None of the car leading manufacturers have been able to even break even. And their break even point has been the toughest challenge for them because today you have a supply chain management problem. You don't have the microchip problem is delivered. It's getting delayed. The exports are getting delayed. The survival of the people are getting delayed. Labour problem, labour unrest and things like that are coming into the picture and the lockouts are coming into the picture. No work, no pay culture is coming into the sector and the whole automobile sector is going through a crash landing. And unfortunately we as a government of India have been only a silent spectator as much as we have done nothing to save the micro entrepreneurs of this country. We continue to only acknowledge the problems through lip service and we are not underlying my word. We are not addressing any solutions to the problems. We are only giving moral value solutions such as I am with the industries. The automobile sector will read out very fast. I am creating a separate corridor of roads for the export of automobile sector. I have created a good strain movement from the automobile factory to all parts of the country. We are only doing the lip services. We have not got into the action. Look at the entrepreneurs who have lost their livelihood from the Ford's action. What action the state government has done yet? What action the central government has done yet? Accepting, acknowledging and assuring we will take care of you. We will take care of you. We will take care of you. Is the mere assurances are enough? It is not enough. Today you and I are talking on the 6th of October. The salary day has crossed. EMI has come into the picture. 30th September is half-yearly over. All the banks are making life miserable for the entrepreneurs. What will happen to the 16,000 employees of Ford? What will happen to the life of the people who are dependent on Ford? Can we afford to have? A bird in the hand is better than two in the bush. We lost the bird in the hand and we don't have in sight the two birds in the hand coming in. Then what are we talking? How can we achieve 100 billion export turnover in Tamil Nadu? How can we invite? How can we talk about one trillion dollar economy for the state or five trillion dollar economy for the government of India? This is the biggest matter of concern. We have just keeping our eyes closed and look at the other side and addressing non-core problems. Yesterday our highway minister has gone record saying sooner instead of haunts you will have musical sound coming out of the cars. Is that the priority to be addressed? Is that what the industry is needing now? People are pathetically crying. People are wondering how will they survive? How will they face? How will they recover from Corona? Is that what is required today? Whether you are playing the music then let us play for two wheelers. If somebody is going to the hospital then let us have a soha song and if somebody is returning from the hospital let us have a gana song. Is that how you treat the sector? Is it the job of the minister to be caring about? He should actually be talking about the closure of Ford. He should be worried. Mr. Piyush must be worried about the sector going away from his hands. The next in line is the real estate sector. Four years we all have been talking about the real estate sector. Where are we? And these two sectors, the micro-entrepreneurs, the service providers, the gig workers everybody is dependent on these sectors. That is specific.