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India exit: Ford Motor in talks with union to decide compensation for workers

Sources told FE that though the management has started the deliberations on the compensation package, the union was not fully ‘comfortable’ with the talks being kickstarted

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US car major Ford Motor Company, which is working on its India manufacturing exit plan, has started negotiations with the union at its Chennai factory to arrive at a compensation package for the workers impacted by the winding-up decision, sources at the plant told FE. The union at the Chennai Ford unit had all along been demanding job guarantee and wanted a ‘third party’ to take over the plant for that to materialise. Workers had even refused to discuss any other options, including a compensation package, citing the reason that it would dilute their case for continuation of job, in the event of a new owner buying the plant.

Sources told FE that though the management has started the deliberations on the compensation package, the union was not fully ‘comfortable’ with the talks being kickstarted, as it will be seen as back-tracking by the workers on the job continuation demand.

Though Ford has been primarily looking for a third-party firm to take over its plants at Chennai and Sanand, indications are that the company appears to have been unsuccessful so far in its efforts.

Ford said it is making all-out efforts to take care of those hit by the winding- up decision, as the deadline nears for the curtain to drop on the local production of vehicles.

When contacted, a Ford spokesperson told FE: “We continue to remain engaged with our employees and union representatives in our efforts to care for those impacted by the restructuring and have nothing further to share today. Ford India will continue vehicle assembly operations in Sanand till the first quarter of 2022 and vehicle and engine manufacturing operations in Chennai till the second quarter of 2022.”

Faced by mounting losses, Ford had decided to cease local vehicle manufacturing in India, as part of its India restructuring announced in September 2021.

Despite investing significantly in India, Ford had accumulated more than $2 billion of operating losses over the past 10 years and demand for new vehicles has been much weaker than forecast. Close to 4,000 employees had been expected to be affected by the restructuring.

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