General Motors' Halol plant unlikely to shut down in June

Carmaker puts closure application to Gujarat government on hold as it is in talks with prospective buyers for this facility

US carmaker General Motors’ Halol plant, 140 km from here, is unlikely to be shut down in June. The carmaker has requested the Gujarat government to put its closure application on hold because it is in talks with prospective buyers for the plant. Sources in the state labour department said the company added a closure application last September.

Later, it requested the government to defer a decision on the application until further intimation.

“The state government then said we cannot put an application on hold for an indefinite period. It is best the company files a fresh application as and when it is ready,” said an official. As of now, no fresh deadline has been set for the closure.

A company has to take permission from the labour department before it shuts down a plant and workers are rendered jobless. It has to provide at least 60 days’ notice and clear all dues of workers.

GM India and China’s Shanghai Automotive Industry Corp (SAIC) executives had met state officials last December. SAIC executives have visited the Halol site to assess the value of the property.

The size of the deal could be around Rs 1,500 crore. GM has invested Rs 1,200 crore in its Halol plant and the Gujarat government has provided incentives worth Rs 800 crore to the company since it began operations in the state in 1996.

A GM India spokesperson said, “We are examining a number of options in relation to the Halol factory, where we intend to cease manufacturing, including the sale of the site. We have nothing further to announce at this time.”

The company announced its decision to shut down the Halol plant, which makes Taveras, Enjoys and Cruzes, in mid-2015 as it decided to invest Rs 6,400 crore in its Talegaon plant in Pune.
 

The Halol plant has an installed capacity of 110,000 vehicles per annum and employed around 1,600 people, of which over 800 are contractual workers. Sources indicated that around 550 workers (most of them contractual) have been severed from the site. "Employees at the supervisor level have been transferred to Talegaon. Around 550 people have been severed in the last one year," alleged Nihil Mehta, president of the Gujarat wing of the Indian National Trade Union Congress. Mehta further claimed that INTUC has filed a complaint against the removal of contractual workers at the Industrial Tribunal at Vadodara.

A labour department source indicated that while the company is in talks with prospective buyers, it is also trying to legally reduce the manpower at site so as to make the facility more viable.