Ford to announce compensation for TN unit employees soon: Minister

Global carmaker Ford which recently announced its decision to shut down its manufacturing units in India, will soon announce a settlement package for its employees in Tamil Nadu, state Rural Industries Minister TM Anbarasan told the media.

Workers were left shocked by Ford’s decision to shutter down its car factories in Chennai and Gujarat’s Sanand, as the closure will affect the livelihood of around 4,000 direct employees and 25,000 people employed with dealers and ancilliary units.

Also read: Future uncertain, Ford employees’ union asks TN govt to protect jobs

Anbarasan, who held a review meeting with over 50 suppliers of auto parts working with Ford from different parts of the state, on Thursday said the government has received information that the carmaker is in the process of announcing a settlement package for those employed in its Chennai factory. He also assured employees that the state government will take all possible steps to secure their livelihood and follow up on the possibility of takeover of the plant by another car company.

“Soon after reports emerged about Ford’s decision early this month, Chief Minister MK Stalin discussed about the possibilities available to safeguard the livelihood of the employees, including the feasibility of another automaker taking over the facility…This government is industry friendly and whatever measures need to be taken, will be taken, in the interest of employees,” he told reporters.

Asked whether there was a possibility of announcing an interim relief package for the employees, he said they were not asked to leave immediately and were receiving their salaries. “Even now the factory is producing cars, employees are being given salaries. We have enough time for that (to announce a relief package). They have announced closure of the plant only in 2022,” he said.

One of the parts supplier who met Anbarasan said he set up shop in 1997 along with Ford, which had commenced operations at Maraimalai Nagar, about 45 km from Chennai. He said 80 per cent of the parts manufactured were supplied to Ford and his company was earning ₹80 crore annually.

“We will be hit hard in the wake of Ford closing down the unit. We even had the land leased from Ford to produce the auto parts,” he said.

Another wiper and blades manufacturer said he had set up a facility in neighbouring Oragadam at an investment of ₹ 7 crore and suggested that the government consider another auto-major taking over the Ford facility.

A senior official of a company engaged in the production of fuel and braking systems for Ford India told PTI they employ about 300 people and were in the process of seeking claims of ₹25 crore from Ford for the loss they expect when the company shuts down its unit.

Later, responding to a query, Anbarasan said “Ford has announced its decision to shut its factory by 2022 and we have received information that it was in the process of announcing a settlement package to the employees. There are about 2,638 workers directly employed and 1,421, indirectly.”

Also read: Automobile dealers want Union government to intervene in Ford exit

The minister said during the review meeting, the Micro Small and Medium Enterprises commissioner and the principal secretary discussed the matter and one of the highlights to emerge from the meeting was that not many auto parts suppliers were directly involved with Ford.

“They were not only supplying parts to Ford but also to other auto majors. Those companies who will be hugely impacted due to Ford’s decision have made a request. We have taken note of it. We will take it up with the Chief Minister (MK Stalin) on further course of action,” he said.

When contacted about the comments made by the government, Ford India said, “we will be working with the unions and other stakeholders on measures to help balance the impact and to care for those directly affected by the restructuring.”

Earlier this month, Ford announced that it will wrap up its operations in the country and would sell only imported vehicles. The company, which has invested about USD 2.5 billion at its Chennai and Sanand plants, would stop selling vehicles like the EcoSport, Figo and Aspire manufactured from these factories.

(With inputs from agencies)