HomeCar NewsMahindra Cuts Over Half Of Its Workforce At Detroit Plant In America

Mahindra Cuts Over Half Of Its Workforce At Detroit Plant In America

Mahindra Roxor
Mahindra Roxor in America. File photo.

The laid off workforce include engineers, sales executives and those working in manufacturing at the company plant in Detroit

It is at the Mahindra Detroit plant that the Roxor is produced. This off roader, which has been on sale in the US markets since May 2018, has been in the news for similarities to the original Jeep design and the automaker had been plagued by multiple lawsuits filed by Fiat Chrysler Automobiles. Mahindra has since removed all Jeep look alikes and the 2021 Mahindra Roxor now bears a refreshed look.

In view of this ongoing legal battle between, along with the ill effects of the COVID-19 pandemic, Mahindra has cut more than half of the workforce at the North American unit. Though no exact figures of how many have been laid off have been revealed, Reuters reports that it could be hundreds of workers who have lost their jobs since mid-2020.

Mahindra Detroit Plant

The job cuts include engineers and sales executives along with several working in the manufacturing processes at the Mahindra Detroit plant from where the Roxor is produced. These job cuts come at a time when the company is reviewing its businesses to cut costs and to only retain those that are profitable.

The legal battle with FCA had prevented Mahindra from selling the Roxor in US markets and production had to be brought to a standstill. Many employees from the manufacturing team had to be sent of furlough while it also resulted in several other job cuts.

Mahindra Roxor import banned in US
Mahindra Roxor. Image – Chris Loomis

After the court ruling in favour of Mahindra and against FCA, the Roxor is once again in sale. The company has released a statement that it could now recall some of its employees.

Mahindra SsangYong

Mahindra’s other overseas investments too haven’t been doing too well. Its South Korean subsidiary, SsangYong had recently filed for bankruptcy after Mahindra refused to infuse fresh funds in SsangYong. As per latest reports, Mahindra is looking for a new investor for SsangYong, which will potentially buy-out the 75% share in SsangYong which Mahindra currently owns. While there has been no official communication regarding the new investor, it has been confirmed that Mahindra is in talks with a potential investor.

If talks work out, then the new investor will become the new majority stake holder in SsangYong. However, if no suitable investor is finalized by 28th February, 2021, SsangYong will have to compulsorily proceed with Court receivership. Mahindra has also shut down their Pininfarina Engineering subsidiary in Italy.

Automakers under Financial Stress

Most auto manufacturers have been under severe stress due to the Covid-19 crisis. While demand has slowly started to revive, supply chain and cost related constraints still loom for majority of the manufacturers. Also, while sales have been decent in the past few months, the huge yearly deficits due to almost negligible sales in the months of March-May have negatively impacted the balance sheets of most auto giants.

Mahindra which has India as its primary market has been loosing market share consistently, thanks to new entrants in the SUV space. None of its products, except the Bolero and the recently launched 2020 Thar command leadership positions in terms of sales in their respective categories. Unsurprisingly, Mahindra seems to be concerned and wants to focus on its home market and regain the lost market share.

Mahindra will be counting upon the next generation XUV500 and Scorpio (both of which shall finally get launched later this year) to improve its sales numbers. Going ahead too, Mahindra’s top executives have confirmed that Mahindra intends to focus on SUVs in the short term and EVs in the medium term.


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