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Ford Struggling To Exit India, Sell Chennai Plant

As Ford Authority reported back in September 2021, Ford announced that it would be ending its manufacturing operations in India after years of losses, meaning that both the Sanand Assembly plant and Chennai Assembly plant would be closing down as well. At the same time, Ford announced that it would be revamping its lineup in that country by adding new and iconic models such as the Ford Mustang and Ford Mustang Mach-E. FoMoCo then began searching for buyers for both of those plants, and wound up selling the Sanand facility to Tata Motors. After a long dispute with workers at the Chennai plant, The Blue Oval settled on a severance package, but it’s having a hard time finding a buyer for that particular facility as a result, according to Rediff.

A variety of potential buyers – including MG Motors, Ola, and Mahindra and Mahindra – have visited the Chennai plant in recent months, but it seems as if lingering severance issues have yet to be ironed out with a number of workers at the facility, which is holding up that particular process. A number of employees – around 60 – reportedly haven’t accepted Ford’s final settlement, which equates to 140 days of gross wages for every year those workers have been employed at the plant, plus a one-time lump sum of Rs 150,000 ($1,840 USD).

Regardless, Ford remains steadfast in its position. “The union agreement is done and executed with all sincerity. If 60-odd people try to create imaginary situations, it is not a dispute,” a Ford official said. Meanwhile, Tata Motors kept Blue Oval workers on its payroll when it purchased the Sanand plant last year.

Regardless, Ford isn’t the only automaker struggling to exit India in terms of manufacturing, as General Motors – which announced its plans to stop building vehicles there back in 2017 – is having trouble selling its Talegaon plant as well, and is currently engaged in a legal battle with around 1,000 workers who want the plant’s prospective buyer to keep them onboard, and for GM to pay them full wages in the meantime.

We’ll have more Ford news from around the world soon, so be sure and subscribe to Ford Authority for non-stop Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. RWFA

    Bizarre situation that workers have that much leverage.

    At some point, given a recalcitrant workforce potential suitors will shy away from acquisition, Ford will lose interest in trying to find a Best Owner to buy plant, want to move on, and will just sell to the highest bidder and take the write off on the book loss.

    The larger part of the workforce may suffer because of a few militant holdouts.

    (That said, it has been known to happen in other cases, that unscrupulous potential acquirers try to stoke such situations to drive the acquisition price down.)

    It will be interesting to see how this develops.

    Reply
    1. Mike says....

      I suspect the union talk on the ground is motivating much of this misplaced angst… none of which helps India in the longer term. Haters hate, and complainers complain, neither of which factors into business decisions. The political dynamics in India is showing their infancy in a rapidly emerging global economy. Ford and GM have both tried to find their footing in this country only to learn they are a long way from being economically viable or persistent. Opportunity awaits… just not yet. In a final note, my handle has a name…. what is a RWFA anyway?

      Reply
      1. RWFA

        Whether the Indian economy or my handle… It is what it is.

        Reply
  2. Bob

    140 days for every year…
    A 5 year worker would get 700 days, almost 3 years of severance?
    Oh heck yea, I feel bad for them.

    Reply

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