Pandemic, legal woes lead to layoffs, furloughs at Mahindra North America
Delayed projects because of the COVID-19 pandemic and a legal dispute over the design of its off-road vehicle have led Mahindra & Mahindra Ltd.'s Auburn Hills-based North American automotive business to lay off and furlough workers.
India's largest SUV manufacturer has a long-held desire to enter the competitive yet lucrative U.S. market. Mahindra Automotive declined to specify how many of its 500 employees have been affected. It previously has said roughly 100 manufacturing workers in its Oakland County plant had been furloughed when it halted production of its Roxor vehicle in August.
The Roxor sales team also has been furloughed. The company has furloughed and laid off engineers because of the Roxor program and delays due to the pandemic in projects on which they collaborate with teams in India.
The U.S. International Trade Commission, however, gave relief to Mahindra last month when it determined the redesign of the off-road Roxor does not infringe upon the intellectual property of Fiat Chrysler Automotive NV's Jeep Wrangler. A previous model did, the commission had determined, and an Oakland County court ordered the company to stop production. FCA has said it will appeal the amended decision.
"ROXOR, for all intents and purposes, is still a startup," Mahindra said in a statement about the vehicle that launched in 2018. "Getting the unexpected one-two punch of Covid-19 and an initial ITC opinion that forced a halt in production that has lasted almost six months, has been the greatest challenge most of us have ever faced and it's forced us to take some difficult actions.
"With the ITC matter finally behind us, we’re excited about the prospect of being able to recall a large group of employees."
The company is hopeful to return to full production by the end of 2021, though it has not said when production will resume at the plant located down Interstate 75 from FCA's North American headquarters.
The cuts come as Mahindra reviews the organization to conserve cash and continue operations that make money or it expects to be profitable. Last month, parent Mahindra and Ford Motor Co. blamed the pandemic for having to scrap plans for a joint venture in India.
This month, Mahindra's information technology services division began laying off 81 employees in Lansing, according to a notice filed with the state of Michigan.
Last summer, Mahindra also withdrew its bid for a contract with the U.S. Post Service. The automaker in 2019 had signed a non-binding agreement to acquire a 364-site at General Motors Co.'s former Buick City in Flint for an assembly plant, but that has not yet occurred.
Mahindra also has a significant presence in the U.S. as a distributor of tractors and utility vehicles. The company has been in the Detroit area since 2013 with a technical center in Troy.