CMC Motors to lay off 169 employees

CMC Motors to lay off 169 employees

CMC Motors Group has declared 169 of its workers countrywide redundant after three vehicle brands namely Mazda, Ford and Suzuki terminated their distribution deals with the company.

In a statement issued by the Group’s Managing Director Sakib Eltaff on Tuesday, the move will affect employees in all levels of management and will be done gradually between the first and fourth quarters of the year.

Mr. Eltaff explained that the termination of the said three contracts will mean a decline in business, which will directly affect employees’ structures and roles in the company, hence the need for retrenchment.

“Three leading brands i.e. Ford, Suzuki and Mazda have terminated and or given notice of termination of their distributorship contracts with CMC Group starting today until Q3 2023. CMC will therefore cease distribution of three passenger vehicle brands it has offered in the market in the next few months,” the MD said in the statement.

“This means that it will become necessary to declare 169 employees redundant. The employees affected are in both management and unionisable categories. The company intends to undertake the redundancy in 3 phases as the distributors wind up their operations with CMC Group between the 2nd quarter of 2023 and the 4th quarter of the year.”

Mr. Eltaff added: “Please note that employees who work in Admin & Support, Finance, IT, Legal, Logistics, Senior Management, Parts, Procurement, Projects, Sales, and Service departments will be affected by the redundancy.”

CMC has been among the leading distributor of passenger vehicles and tractors in the East African region and has branches in Mombasa, Nakuru, Kisumu, Nanyuki, Meru, Eldoret and Kitale.

According to the Group, the move by the three brands to terminate their distribution contracts was fueled by a decline in the market in the country.

“The market has experienced a considerable decline in the passenger vehicle business due to poor economic conditions, slow growth in the new vehicle sector, a dwindling number of customers and competition from dealer groups,” stated the MD.

It has now hinted at venturing into the agricultural sector, as a result deeming some of the workers redundant.

“As a result of the termination of these distributorship contracts coupled with the changes in the market demand, CMC Group is re-organizing its business in line with a growth strategy that will see it place great focus on the agricultural sector. This will result in a reduction in the number of roles and the resources required to execute the remaining functions,” added the MD.

In regard to the layoffs, the company has however reassured the workers that all their dues will be paid in adherence to Section 40 of the Employment Act.

“In declaring the employees redundant, every measure will be taken to ensure compliance with the requirements of Section 40 of the Employment Act, individual contracts of employment and the Collective Bargaining Agreement between the company and the Union,” Mr. Eltaff added.

“The employees will be paid their terminal dues in accordance with their contracts of employment and as guided by the existing Collective Bargain Agreement Salary for days worked up to the date of termination including; Salary in lieu of notice based on the number of years and CBA, severance pay for each completed year of service based on the number of years and CBA and pay in lieu of leave days accrued but not taken.”

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Citizen Digital Citizen TV Kenya Ford CMC Motors Mazda Suzuki Sakib Eltaff

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