Ford India has today officially announced that the company has arrived at a settlement with the union of its Chennai plant’s workers. In an attempt to pacify the workers, the final revised severance package of this American carmaker for its employees ranges from a minimum amount of Rs 34.5 lakh to a maximum cap of Rs 86.5 lakh.
According to the company, its revised package will translate to an average of about 5.1-years or 62-month of salary for each employee. The formal settlement agreement is planned to be executed before the end of this month. Ford will notify employees of the next steps and aims to complete the exit formalities by September 30, 2022. The company will continue paying wages to all employees until the end of this month to support the exit formalities.
Ford India says that it remains grateful to the Chennai Ford Employees Union (CFEU) as well as Tamil Nadu Government and Labor Officials for their support. Here’s what the company mentioned in its official letter, “Since the announcement of business restructuring last September 2021, Ford has continuously made efforts to negotiate a fair and reasonable severance package and is happy to arrive at a settlement with the Union.”
It further added, “Per the agreed settlement, the Company will revise the final severance settlement to an average equivalent of 140 days of gross wages per completed year of service from the ongoing offer of 130 days. An additional one-time lump sum of Rs 1.5 lakh will also be included in the final settlement.”
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“The cumulative severance for each employee will range from a minimum amount of Rs 34.5 lakh and a maximum cap of Rs 86.5 lakh (i.e., translating to an average of Rs 44.8 lakh per employee). The revised settlement will translate to an average of about 5.1-years or 62-month of salary for each employee (from a minimum of 3.9 years i.e., 47 months to a maximum of 8.7 years i.e., 105 months),” it concluded.
For the uninitiated, on September 9, 2021, Ford Motor Company decided to cease local vehicle manufacturing in India as part of its global restructuring plan. The company had two plants in India. While its Sanand (Gujarat) plant has been now brought by Tata Motors’ EV subsidiary, Ford has not found an alternative for its Chennai facility and will continue to retain the ownership of the land and machinery.
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