According to company sources, production may be halted on Fridays as well, to bring inventory levels in line with market demand. Informal consultations have begun with the union regarding this. While admitting that the `thinking was on such lines', a senior company source said the step would have to be taken if the market did not improve. Ashok Leyland is in the midst of implementing a 16-day lay-off over a period of three months. While eight days of shutdown were completed in June itself, the balance eight days have been spread equally in July and August by closing the plant on Saturdays. If the proposal to stop production on Friday is implemented, the effective working week would reduce to three days, taking into account the weekly holiday of Monday and the optional working day of Sunday (the option has not been exercised for manymonths).

Managing director R Seshasayee has gone on record that ``hard steps would have to be taken'' if the market scenario showed no signs of improvement. He had also said that a decision to implement further lay-offs would have to be taken on a month-to-month basis, depending upon the situation. The unprecedented recession afflicting the commercial-vehicle industry has led to a sharp reduction in sales in the current fiscal's first quarter, compared with the previous year.

Ashok Leyland sold 4,520 vehicles this quarter, against 6,000 in the first quarter of 1996-97, and the overall market sales fell 53 per cent from 24,800 vehicles in 1996-97, to 11,770 vehicles.

An year-to-year look shows that the market in 1997-98 was only marginally better than in 1993-94. Total sales in quantity terms in 1997-98 were only 1,56,063 vehicles, compared with 2,34,921 the previous year. The figure for 1993-94 was closer at 1,50,672.

The substantial savings in the form of lower inventory and operating costs such aspower and transport during the lay-off period is more than the 50 per cent wages (though Ashok Leyland would pay full wages now, the employees have agreed to work for eight extra days in 1999-2000, by which time, the company hopes the market will improve) that have to be paid.

This would help the company salvage some margins.