Pininfarina Engineering lost crucial orders from its Hong Kong and Iran-based clients due to the pandemic crisis
Under the ownership of Mahindra Group, the famed Italian design house Pininfarina initiated its move up the value chain by equipping itself with comprehensive vehicle development capabilities. Roughly two years ago, Pininfarina SpA spun off its Turin-based technical center into a standalone subsidiary under the banner Pininfarina Engineering. The new entity, currently 135-employee strong, is capable of handling turnkey vehicle development projects for global clients.
Pininfarina Engineering to be liquidated
Pininfarina Engineering started off on a strong note with promising high-value international projects. The subsidiary has been working on vehicle and platform development projects for Hong Kong-based Hybrid Kinetic Group, Iran Khodro and Vietnam’s VinFast. The team has also been working on some projects for its parent brand Mahindra.
With the COVID crisis affecting businesses all over the globe, Pininfarina Engineering reportedly lost its business from Hong Kong and Iran-based clients, leading to a loss of several million euros. With the outlook for global auto industry continuing to be bleak, Mahindra Group has decided to mitigate its loses by liquidating Pininfarina Engineering.
The decision to shut down Pininfarina Engineering was announced by Pininfarina SpA to the Italian trade units in October and was immediately met with resistance from its employees and concerned trade unions. The move will lead to loss of 135 jobs and the employees took to Turin’s main square to voice their protest.
Negotiations with trade unions in progress
Since the announcement, a few rounds of negotiations between the trade unions and Pininfarina Engineering’s management have taken place and more rounds are expected to be scheduled in the coming days. So far, Pininfarina SpA has proposed to absorb 60 of those 135 employees back to maintain an engineering division internally.
However, the employees and concerned trade unions are not happy with this proposal as some of them feel that this could be a cheeky move to downsize the staff by half and pay the remaining 30-40% less.
Employees’ letter to Mahindra Group
If the concerned parties fail to reach a resolution by January 15, 2021, the 135 employees are slated to be laid off. In addition to protesting in public, the employees also reportedly wrote a letter to Mahindra Group questioning its decision to liquidate Pininfarina Engineering within 2 years from establishment.
In the letter, the employees argue that they are collectively qualified, experienced and competent in complete vehicle engineering projects and they cost much less than similar workforce in other countries like UK, Germany, France, etc. They end the letter by saying they do not understand how the decision to lay them off under these challenging circumstances compatible with the ethical and social guidelines declared by Mahindra and its Chairman.