Ford in talks with another auto firm for Chennai unit handover: TN govt

Last year, Ford was in talks with Ola and M&M for contract manufacturing or for sale of both plants. It isn't clear whether the current talks are with the same companies or not

The Ford Motor factory at Maraimalai Nagar wore a deserted look on Friday, a day after the announcement of the company announcing the shut down of its factory. However, in a huge relief to about 2,600 workers, the state government said talks are on between Ford and another automobile major to take over the operations 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,” N Muruganandam, principal secretary (industries), government of Tamil Nadu, told Business Standard. Last year, Ford was in talks with firms like Ola and Mahindra and Mahindra for contract manufacturing or for sale of both factories. It is not sure whether the current talks are with the same companies or not.

On Thursday, Ford Motor Co. had announced that it will shut its car factories in India and record roughly $2 billion in restructuring charges. As per the company, manufacturing of vehicles for sale in India will stop immediately, and about 4,000 employees will be affected. While the Sanand vehicle assembly unit will be shut by the third quarter of the current financial year, the Chennai engine and vehicle assembly plants will stop operations by the first quarter of the next financial year. The decision is expected to affect over 4,000 employees and around 40,000 people employed with dealers.

The Chennai unit spread across an area of 350 acres had an annual production capacity of around 200,000 vehicles and 340,000 engines. The site, manufacturing Ford EcoSport and Ford Endeavour, has so far seen investments to the tune of around $1 billion and used to export cars to around 37 countries at one point. On the other hand, the Sanand facility is spread over 460 acres and has an installed capacity of 240,000 vehicles and 270,000 engines per annum. The site manufactures Ford Aspire and hatchback Ford Figo and has also seen investments to the tune of around $ 1 billion.

Employees unsure about future

Around 2,600 employees and workers of the ancillary units at the Maraimalai Nagar unit are still left in a lurch not knowing the future course of action. On Friday, the plant was shut due to Ganesh Chaturthi celebrations and security officials who were present at the plant informed Business Standard that for almost a week.

“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,” said Arun Sanjivi, a worker at the body shop of the factory and also the secretary of Chennai Ford workers Union.

The company said in a tweet that the decision is to create a new asset-light model, which is sustainable for a longer term and it has no plans to leave India. “Our major cause of concern is the jobs of employees in both the plants. Now, our employees are at home for almost a week due to the shut down. We want to listen to the offers that the company is coming up with and if they are going to hand over the plant to a new player, saving some of the jobs, that would be good,” said Suresh S, president of the Union.  The Union may take a call on whether to take legal option or not only after the meeting.