MM Forgings, auto-parts maker is likely to shift a part of its machining processes to tier-II cities in Tamil Nadu due to labor shortage in Chennai. The company's manufacturing plant in Chennai is located at Padappai -3 km from the auto manufacturing hub of Oragadam.
Currently, Oragadam is home to over 400 companies, while when MM Forgings set shop in Oragadam in 2002, it was one the few settlers in the area. This growth has triggered a labor crisis, especially at the shop-floor operation level.
The company requires 250 people at the machine shop but it observed that people leaving in double digits in every month. The machinists are particularly in demand, as the skill is generic across most manufacturing industries.
While the company has managed the situation by recruiting on the spot, this brings down skill levels, while rejections go up, as it takes nearly a month to substitute people and train them too. All this hits production and quality in the long term. The company's three plants employ 2,000 people in total (700 in Chennai).