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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