GM prepares to shut down Pune plant: No nod for deal with Great Wall Motors

Talks went on till late Tuesday evening between the GM management and the workers' union. The workers' union reached out to Maharashtra chief minister Uddhav Thackeray, urging him to keep the factory going or to find new buyers so that jobs could be protected.

By:December 23, 2020 9:05 AM

The car-manufacturing unit of General Motors (GM) at Talegaon in Pune is preparing for a shutdown on December 24. The company announced the plan to close the factory after its deal to sell the plant to Chinese automotive company Great Wall Motors (GWM) could not be concluded as regulatory approvals did not come through. The plant has 1,000 employees. Talks went on till late Tuesday evening between the GM management and the workers’ union. The workers’ union reached out to Maharashtra chief minister Uddhav Thackeray, urging him to keep the factory going or to find new buyers so that jobs could be protected. Workers are also exploring legal options at the industrial court in Pune. Union sources said the company would not be able to shut down till the Maharashtra state government approved it.

The GM plant spread across 300 acres had capacity to produce 1.65 lakh vehicles and an engine plant to make 1.6 lakh engines. GM had exited from the domestic market in 2017 and was using the plant for exports, which has been on a decline since then. Production at GM’s plant was to continue till the end of this year to meet export demand from Mexico and Latin America. Workers have urged the company to bring in new investors or offer them a voluntary retirement scheme.

GM had signed an agreement with Great Wall Motors in January 2020 which was to be completed by end of the year. GWM was lining up products such as SUV and electric vehicles for its India launch till the border clashes with China upset their plans. GMW had plans to upgrade the plant and create jobs for 3,000 people. GWM signed an MoU with the Maharashtra government to invest around $1 billion. In June 2020, the Maharashtra government announced it was putting the GM deal with GMW on hold. The DPIIT also amended rules regarding investment by entities from countries that shared land border with India that would need central government approval and the deal was stuck because of this.

GWM and GM had signed an agreement for the sale of GM India’s Talegaon manufacturing facility with the two companies targeting 2020 end for closing the deal and the handover. This would have led to GM’s total exit from India and entry of GMW into India’s domestic vehicle market. The deal size has not been revealed. GMW was to debut its Haval brand in India. It had at that time said it would provide a separation package and transition support for impacted employees.

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