In what could be called a saving grace for around 2,600 workers of Ford’s factory at Chennai’s Maraimalai Nagar who are on the brink of losing their jobs, the Tamil Nadu government has said that talks are underway between the company and another carmaker for the handing over of the unit.
“Talks are on between Ford and another automobile maker and some other companies too. The state government will facilitate the smooth handover of the land if they reach a deal,” Business Standard quoted N Muruganandam, principal (industries) secretary of the state government as saying.
Muruganandam didn’t reveal the name of the automobile major with whom the talks are underway, although last year Ford was in talks with companies like Ola and Mahindra and Mahindra for contract manufacturing or sale of both its manufacturing plants (at Chennai and Gujarat’s Sanand).
Citing losses of over $2 billion over the past decade, Ford, one of the first global carmakers to enter India at the dawn of globalization in the 1990s, recently announced that it is shutting shop in the country. The decision is likely to affect the livelihood of around 4,000 workers at both the plants of Ford and 40,000 people employed with Ford dealers.
While the Sanand vehicle assembly unit will be closed by the third quarter of the current fiscal, the Chennai engine and vehicle assembly plant will shut down by the first quarter of the next fiscal.
The American carmaker which had an annual manufacturing capacity of 400,000 units is recently said to have been functioning at a utilization of 20 per cent.
The Chennai unit (350 acres), which manufactured Ford EcoSport and Ford Endeavour, had an annual production capacity of around 2 lakh vehicles and 3.4 lakh engines. The unit had seen investments worth $1 billion and had exported cars to around 37 countries at a time. The Sanand unit, which is spread on a bigger area of 460 acres had a capacity of 2.40 lakh vehicles and 2.7 lakh engines per year. The plant, which manufactured Ford Aspire and Ford Figo, saw an investment of $1 billion.
The company in August this year had a share of only 1.4 per cent in the Indian market.
Ford’s decision to shutter down the plants, however, was a blow to its employees in both the units.
“We were informed about the decision only yesterday after their public announcement. They informed us about this only through mail. The management has called for a meeting on Monday and we want to listen to what they have to say,” BS quoted Arun Sanjivi, secretary of the Chennai Ford Workers’ Union and an employee at the body shop of the Maraimalai Nagar unit, as saying.