More than three months after the signing of the term sheet, Hyundai Motor India’s plan to buy General Motors’ automotive plant in Pune is stuck over the decision to absorb the latter’s workforce.
Over 1,000 agitating workers are demanding to get absorbed by Hyundai at the Talegaon plant, near Pune. However, the Korean automaker has shown little interest so far, claim workers.
Without elaborating further, a Hyundai Motor India spokesperson said, “We are aiming to conclude the deal within the year 2023.” The term sheet covers proposed acquisition of land and buildings, certain machinery and equipment for manufacturing, and the acquisition is subject fulfillment of undisclosed conditions precedent.
“GM and Hyundai have signed a binding term sheet to support the sale of GM’s Talegaon manufacturing facility to Hyundai. GM ceased manufacturing at the site in 2020. The transaction is subject to government and regulatory approvals,” a GM spokesperson said.
“Hyundai is not talking to us directly and we have come to know that the company is not keen on employing us. We can’t get jobs elsewhere since the average age of the workers here is 35 and can’t even accept the voluntary retirement scheme (VRS) offered by GM,” said a former worker at the plant.
A few years earlier, GM had sought the Maharashtra government’s permission for closure of the Talegaon plant on the similar lines as that of its Halol, Gujarat, plant before mid-2017. And after the Gujarat government’s nod, it sold the plant to MG Motor India a few months later.
GM had also approached the Bombay High Court challenging the Maharashtra government’s rejection of its plant closure application. But the court turned down the application.
Under the terms of plant closure, the unit permanently shuts and the employees get legally separated, thereby wiping out chances of a challenge by its employees.
“GM has applied for the plant closure and, on the other hand, it informs the government its intention of selling the plant. The Pune Industrial court is looking at the application. Even if the closure gets approved by the industrial court, we will challenge it in the higher courts,” added the former GM worker.
Senior officials of GM and Hyundai met Maharashtra’s deputy CM Devendra Fadnavis soon after the term sheet was signed through a Delhi-based consulting firm. The request to get comments from the consulting firm remained unanswered at the time of going to press.
The acquisition of GM’s Talegaon plant will help Hyundai tide over the capacity constraint in short- to mid-term. Its current production capacity is 820,000 units per annum, which is slated to go up to 850,000 units per annum this year. With GM’s plant capacity of 165,000 units, Hyundai’s total capacity in the country could surpass the 1-million mark.
The acquisition also holds the key for Hyundai to maintain its lead over Tata Motors, India’s third-largest carmaker, which completed the acquisition of Ford Motor India plant in Gujarat a few months ago. With this, Tata Motors’ total capacity will also go up to 1 million units per annum from 600,000 units per annum at present.
