Following a positive response to the severance package it offered to workmen, US car major Ford has decided to extend production till July-end 2022 at the closure-bound Chennai factory.
The company said that for all employees continuing to support production in July, the wages will be protected. The company had scheduled to close the factory by the end of the second quarter of 2022.
In an emailed response, a Ford India spokesperson told FE: “Pursuant to the employee cascade on June 9, 2022, the company received a positive response, with a vast number of employees consenting to support production in parallel to discussions on the severance package on offer.
Therefore, the company has decided to extend production till end-July 2022.”The company previously said that close to 50% of employees had consented to support production, while requesting to further discuss the severance package on offer at its Chennai factory, where a section of employees are on strike despite the offer by the management.
“For all employees continuing to support production in July, the wages/employment will be protected. For employees continuing to be on an illegal strike, a loss of pay remains in effect since June 14, 2022,” he said further.
The management had previously said it looks forward to having a constructive dialogue with employees and union representatives to explain the details and benefits of the severance package, under the supervision of the labour department.
To ensure the safety and security of the employees, staff and property, Ford had requested support from police to prevent the protesting employees from interfering with the ingress and egress of employees supporting operations and materials into and outside the factory.Ford India had extended the deadline for accepting the severance package by the workers to June 18 from June 14.
The plant has resumed operations, though partially, with participation of around half of the workforce on June 14, after two weeks’ strike by workers seeking a better compensation package.
Ford said that those who still continue on strike will be slapped with loss of pay and had warned of early closure of the unit, before completing the remaining export volume production. The factory has been making final lots of the EcoSport for the export markets and is slated for closure by the end of this month.
The Ford management proposed a compensation package under which the workers were offered 115 days of gross wages for each completed year of service. The company had claimed the package would be significantly higher than the statutory severance package, or 15 days of wages, for each completed year of service.
The package offered includes an ex-gratia amount equivalent to 87 days of the last drawn gross wages (May 2022) and a fixed amount of `50,000, both being for every completed year of service.
In addition, benefits equivalent to a lump-sum amount of `2,40,000 and continuation of current medical insurance until March 2024 were offered. As per the notice, the cumulative amounts for components set out will be subject to a minimum amount of `30 lakh and a maximum cap of `80 lakh.