Ford executes settlement agreement with workers in Tamil Nadu plant

Ford India, the subsidiary of the US car maker Ford said it has concluded negotiations on 'severance settlement package' with the employees of its manufacturing plant

Ford India, the subsidiary of the US car maker Ford on Saturday said it has concluded negotiations on the 'severance settlement package' with the employees of its manufacturing plant near here, a year after it announced that it would exit the Indian market as part of the company's 'restructuring exercise.'

Ford India Transformation Officer Balasundaram Radhakrishnan handed over the updated settlement agreement to the office bearers of the Chennai Ford Employees Union representing the 2,592 employees on Friday, a statement from the company said.

"The severance settlement agreement, signed between Ford and the Union today (Friday) is an important milestone and a win-win for everyone involved. I thank the team at Ford as well as the Chennai Ford Employees Union for negotiating in good faith and arriving at a settlement outcome that keeps the best interest of employees," Radhakrishnan said.

The company, in view of the forthcoming festive season has also decided to pay an additional amount equivalent to one month of gross wages as a sign-on benefit for employees who the complete the exit process by October 14, 2022.

Accordingly, the final settlement package is an average equivalent of 140 days of gross wages per completed year of service and additional Rs 1.50 lakh lumpsum per employee signed on Friday translates to an average of about 62 month salary for each employee (49 months to a maximum of 9 years 108 months) guaranteeing an adequate financial cushion and time for each employee to chart their future action.

The last date of employment for all employees is September 30 and the company is notifying the employees of the next steps and looks forward to completing the exit formalities.

"We thank our employees in advance for their patience and support in the process and remain grateful to the Tamil Nadu government and labour department officials for guidance," he said.

In July, the company rolled out the last car formally produced at the facility at Maraimalai Nagar, about 45 kms from here, that has been running for more than 25 years.

The workers had staged a protest seeking better pay soon after the car major, in September 2021, announced that it would stop vehicle production at its two plants -- Sanand in Gujarat and Maraimalai Nagar near Chennai in Tamil Nadu -- as part of its restructuring exercise.

Ford also shelved plans to manufacture electric vehicles in India for exports despite getting approval from the government for production-linked incentive.