There was a glimmer of hope for Ford India’s employees when the company contemplated making its plant at Maraimalai Nagar, to the south of Chennai, a global manufacturing hub for electric vehicles. The parent Ford Motor Company even applied for and was selected under the Government of India’s production-linked incentive scheme for electric vehicles. But all the hopes were dashed when Ford decided to withdraw from the PLI scheme.
The nearly 2,400 employees at the Maraimalai Nagar plant, many of whom have been with the company for more than a decade, now stare at an uncertain future, while their counterparts at the Sanand plant in Gujarat are lucky since Tata Motors’ subsidiary Tata Passenger Electric Mobility Ltd has signed an agreement with Ford India to acquire the plant. Tata Motors, which has ambitious plans in the electric vehicle space, plans to invest and make the Sanand facility the hub for its electric vehicle manufacturing. Tata Motors has another plant at Sanand, which it set up to produce the now-discontinued low-cost car Nano.
It was in September 2021 that Ford Motor Company announced its decision to immediately cease producing vehicles in India, with the production of vehicles for exports from Sanand to be wound down by the fourth quarter of 2021 and the Chennai engine and vehicle assembly plant to be shut down by the second quarter of 2022. This follows accumulated operating losses of more than $2 billion and a $0.8 billion non-operating write-down of assets in 2019. The company had said about 4,000 employees were expected to be affected by the decision.
While Tata Motors’ acquisition of the Sanand plant had been speculated upon ever since Ford announced its decision to stop producing cars in India, the fate of the Maraimalai Nagar plant – Ford India’s first plant in the country – was uncertain. It was wildly speculated that Hyundai Motor India, which has a much larger plant at Sriperumbudur, to the west of Chennai and a short distance from Ford India’s facility, was keen on acquiring Ford India’s Maraimalai Nagar plant as it was looking to expand its capacity. The Maraimalai Nagar-Oragadam-Sriperumbudur belt is an automotive hub that includes, apart from Ford and Hyundai, companies such as Renault-Nissan, Daimler India Commercial Vehicles, Royal Enfield and Yamaha. There was also speculation that Ola Electric, which has begun assembling electric two-wheelers at Hosur in Tamil Nadu, was keen on leasing one line at the Maraimalai Nagar plant to make electric cars. Industry sources, however, say both these were only in the realm of speculation, and nothing had been discussed.
According to people in the know, there are no concrete plans on the table, and Ford India is only interested in settling with the workers. There is talk that an outside player wants just the plant and machinery without the workers. Workers’ representatives are worried that this is what may happen.
According to reliable sources, the DMK Government in Tamil Nadu is keen to find a buyer for the plant. After all, Ford’s decision to shut down operations came barely a few months after the DMK won the elections and formed the Government, and it did not want the shutting down of a multinational company on its record books.
Workers’ representatives say that Ford India has not given notice to the workers as per the provisions of the Industrial Disputes Act. There have also been no tripartite talks involving the company, workers and the Government. A section of the workers is reportedly keen on getting whatever compensation that the company offers them and walking away to start a new life. But workers’ unions say this will defeat the collective bargaining ability of the 2,400-odd workers at Maraimalai Nagar. During informal discussions, the workers have learnt that the compensation is nowhere close to what they expect. At the bare minimum, they expect to get the same compensation that workers of General Motors, another American multinational car manufacturer that shut down operations in the country, got when the company closed down in 2017.
The workers at the Maraimalai Nagar plant have been agitating for a fair settlement. However, it depends on how long they can hold on and collectively bargain for a better deal. Till then and even afterwards, their future remains uncertain.