Gujarat cabinet nod for Tata Motors' takeover of Ford India's Sanand plant

Tata Motors to continue to enjoy incentives that were extended to Ford India

The Gujarat government has given its green light to Tata Motors to take over Ford India’s passenger car plant in Sanand.

“The state Cabinet has issued a no-objection certificate for the purpose. It is now up to the companies to work out the nitty gritties,” a senior government official told Business Standard.

According to the official, Tata Motors would continue to enjoy the incentives that were extended to Ford India.

A source in Tata Motors also confirmed the nod from the Gujarat Cabinet. However, a Tata Motors spokesperson declined to comment.

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Now, Tata Motors is likely to sign a memorandum of understanding (MoU) with Ford Motor Company after working out issues pertaining to the plant, including labour and financial matters.

The Tata Group had been meeting state governments of Gujarat and Tamil Nadu for a potential takeover of Ford India’s plants. This came after Ford had announced its exit from India last year.

The Sanand plant has around 2,500 permanent workers, including nearly 900 union workers, mostly on the shop floor.

After passenger cars were discontinued, workers at Sanand were engaged in manufacturing spare parts for Ford cars, apart from engines.

However, the company had set an internal deadline for the car plant up to March 2022 for manufacturing spare parts.

Last year, Ford was in talks with companies like Ola and Mahindra for contract manufacturing or for the sale of both factories. This did not work out and led to the closure announcement.