Ford forcing dealers to sign NDA – FADA writes to Minister of Heavy Industries

FADA has written to the Minister of Heavy Industries seeking intervention claiming that Ford is asking its dealers to sign an NDA before any compensation package is worked out. FADA is asking the Ministery to take take a few steps to protect dealers.

ford forcing dealers to sign nda

Ford’s in the news again, this time for forcing its dealers to sign a Non Disclosure Agreement (NDA). Ford had asked all its dealers to sign an NDA before 14 September, without disclosing compensation. The Federation of Automobile Dealers Associations has written to the Minister of Heavy Industries seeking intervention.

The letter states, “Sudden exits by these MNCs cause great distress to the entire auto retail industry and hamper both, the entrepreneur’s zeal to do business and the customers’ interests, by leaving the customers high and dry with no proper after-sales support. This not only tarnishes the dealers’ name in the society, as the dealers are the face of the brand but also tarnishes Brand India’s value. Crores of rupees go down the drain as it kills an entrepreneur’s vision to get into business again.

The letter further details other brands that exited India such as General Motors, Harley-Davidson, UM, MAN Trucks, and now Ford. As per the letter, Ford’s exit will affect 170 dealers across India, 40,000 employees, and a cumulative loss of ₹2000 crore, the highest amongst the five brands that exited the country.

The letter states, “Ford India is forcing its dealers to first sign Non-Disclosure Agreement (NDA) latest by September 14, 2021 before any compensation package is worked out. Many Ford dealers have directly or indirectly requested FADA to take up the matter for an amicable resolution.” FADA has also written to Ford India President & MD Mr Anurag Mehrotra requesting him to share more details, as the association says “the definition of Confidential Information is extremely broad and does not explicitly mention the scope of the discussions that Ford intends to undertake with the dealers.”

The letter states, “In light of the above, we humbly request your Ministry’s intervention in the matter and to take the following steps immediately:
1- Create a task force that takes a day to day updates from Ford India to monitor the compensation plan for automobile dealers and dealership employees ;
2- Instruct Ford India to keep FADA in the loop for dealership related issues and compensation structure;
3- Initiate a formal discussion on Automobile Dealers’ Protection Act, and its importance to protect small and medium enterprises, their skilled employees and the customers;
4- Make sure that Ford India indemnifies dealers from various consumer and civil cases, both under pendency and against any future cases that may arise directly or indirectly out of Ford’s restructuring announcement.”

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First published on: 23-09-2021 at 20:18 IST