A day after Tata Motors inked a pact to take over Ford’s Sanand plant in Gujarat, the US car major said it continues to remain engaged with employees and union representatives on all outstanding matters, including compensation for the workers at the Chennai plant. The statement comes after workers at the Chennai facility started a protest demanding a better severance package following the announcement of the Sanand plant pact.
“Given the ongoing nature of the discussions, we have nothing further to share at this point. As we hold the dialogue, we continue to have all manufacturing employees on the rolls in Chennai,” a Ford India spokesperson told FE in an emailed response.
Expressing displeasure over being left out by the management in securing job continuity by roping in a third-party company, like in the case of Sanand plant, the agitating workers at the Chennai unit have requested the state government to at least help secure a better severance package for them from Ford, sources in the union told FE. Currently, the plant is manufacturing the final batches of the Ecosport for the export markets.
Tata Motors on Monday announced that its subsidiary Tata Passenger Electric Mobility and Ford India have signed an MoU with the Gujarat government for the potential acquisition of the latter’s Sanand vehicle manufacturing facility, including land and buildings, vehicle manufacturing plant, machinery and equipment, and transfer of all eligible employees of Ford’s Sanand’s vehicle manufacturing operations.
Ford India will operate its powertrain manufacturing facilities by leasing back the land and buildings of the powertrain unit from Tata Motor’s arm.
Ford dropped its proposed plan to manufacture electric vehicles in India and make the country a hub for EV exports, in May second week. It announced in September 2021 that the company would cease local vehicle manufacturing in India. As part of its India restructuring, the company had decided to stop manufacturing of vehicles and planned to wind down Sanand vehicle assembly plant by the fourth quarter of 2021 and the Chennai engine and vehicle assembly plants by the second quarter of 2022.
As part of the ongoing business restructuring in India, Ford has continued to explore possible alternatives for its manufacturing facilities. This included applying for the production-linked incentive (PLI) scheme, which allowed the company to explore utilising one of the plants as a potential EV manufacturing base.
Announcing its decision to stop manufacturing in India, Ford had last year said that despite investing significantly in the country, the company 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.