Dealers of General Motors in India have decided to explore the possibilities of filing class action suits against the American automaker in the US over inadequate compensation being offered to them. GM has decided to stop selling vehicles in India by the year-end and focus just on exports from here, offering compensation to its dealers. In a meeting held today, which was also attended by the entire senior leadership of Federation of Automobile Dealers Associations (FADA), around 40 dealers of the company decided to take up the issue of measly compensation being offered to them with various ministries as well.
“We have asked our legal counsel to speak with senior attorneys in the US to look at the possibility of filing class action suit against the company. If it can be done we will do it,” FADA President John Paul Kuttukaran told PTI. The decision whether dealers would file the cases directly or under the aegis of FADA would be finalised soon, Kuttukaran added. “We are considering all options, whether arbitration, or filing cases in the US. The fact of the matter is that these people who have put in large investments are feeling cheated. We will do everything in our power to help them,” Kuttukaran said.
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A majority of General Motors 96 dealers, which operate around 140 showrooms across India, are unhappy with the company’s offer of just around 12 per cent of total investments they have made as compensation. When asked for other decisions taken at the meeting, Kuttukaran said that the dealers and FADA would be writing to PMO and various ministries to put pressure on the company to give dealers adequate compensation. “Around 15,000 people are going to lose their jobs. How can the government let it happen? We will also be demonstrating at Jantar Mantar to highlight our grievances,” Kuttukaran added.
The company kept the dealers in dark about shutting domestic operations and now they are using various tactics to force them accept inadequate compensation, Kuttukaran said. As per the conditions set by General Motors, a dealer who does not accept its offer by July 15, would only get 50 per cent of the compensation amount being offered. In case a dealer does not accept the offer by September 15, he won’t get any of the compensation at all. In 2015, the company had announced to invest USD 1 billion in India to enhance manufacturing operations and roll out 10 locally produced models in the country over the next five years.
In January this year, the American firm put on hold its investments on new models for the country as it undertook a full review of its future product portfolio in the country. On May 18, General Motors suddenly decided to stop selling its vehicles in India as there was no turnaround in its fortunes here after struggling for over two decades to make a mark. The company will now focus on exporting vehicles from its manufacturing plant at Talegaon in Maharashtra after it stopped production at its first plant at Halol in Gujarat last month.