GM's Halol plant gets fresh life till March 2017

Company says it is evaluating options including sale; extension of production would ensure orderly transition of employees

General Motors India, which had announced a planned closure of its Halol facility near Vadodara in Gujarat about a year ago, today informed that it would extend production at the site till March 2017.

The company also added that it continues to review future options for the site, which would now produce the uprgraded Tavera. The plant as such produces 120-130 cars per day at the moment.

According to GM India president and managing director Kaher Kazem, this will provide more time to ensure an orderly transition for employees, suppliers and other stakeholders as the company continues to work through options for the facility.

The company also confirmed that in coming months it would begin production of the upgraded Tavera at the Halol Assembly Plant."GM India will continue with our plan to consolidate manufacturing at our Talegaon plant," said Kazem. "We are exploring a number of options in relation to the Halol site, including its sale. Selling the plant may include contract manufacturing to ensure continuity for the upgraded Chevrolet Tavera," he added.

The company announced its decision to shut down the Halol plant, which makes Tavera, Enjoy and Cruze, 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 600-700 are contractual workers.

The company had submitted a closure application to the state government in September last year. However, later the carmaker requested the Gujarat government to put its closure application on hold because it is in talks with prospective buyers for the plant. It requested the government to defer a decision on the application until further intimation.

The labour department, however, said that it cannot put an application on hold for an indefinite period, and therefore, asked the company to file a fresh application for as and when it is ready.

Talks were on with China's Shanghai Automotive Industry Corp (SAIC) to sell the Halol plant, and the officials of the Chinese company had met senior state government officials last year.

Sources in the know revealed that the deal could not be worked out as SAIC was keen to not absorb the high workforce of the Halol site. The company thus has decided to continue production at the site to ensure a more seamless transition.

GM India recently announced its plan to launch at least five new Chevrolet models within the space of 24 months, including the new Trailblazer, new Beat, Essentia new Cruze and Beat Activ.