Ford Motor Company’s Indian unit held a town hall for its employees to announce its plan to restrict manufacturing activities in India due to a nearly $2 billion accumulated loss and dropping volumes.
Ford Motor Thursday announced that is going to shut its two manufacturing plants in India in Chennai (Tamil Nadu) and Sanand (Gujarat).
“Ford Restructures India Operations: To cease vehicle manufacturing in Chennai & Sanand; Progressively wind-down manufacturing of vehicles for export at Sanand plant by Q4 2021 & Chennai engine/vehicle assembly plants by Q2, 2022; To continue engine manufacturing for export,” tweeted Ford.
Ford To Quit India?
The automotive firm has stated that it will not leave the country; nevertheless, there is no clear direction as to how the company will compensate its employees and dealerships.
“Ford is NOT leaving India. The changes we have announced today are designed to create a new, asset-light business model, which is sustainably profitable in the longer term,” Ford responding to several users on Twitter wrote.
How It Will Impact Employment?
Many of Ford India’s 4,000-plus permanent employees would be displaced as a result of the decision.
“Ford will work closely with employees, unions, suppliers, dealers, government and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to mitigate the effects of the decision,” the company said.
“This is a very difficult decision. No matter what we tried and investigated, all our projections show we will continue to give sub-optimal returns to shareholders and investors. There was no other option, but to restructure,”
Anurag Mehrotra, MD and president of Ford India, said as he outlined a new strategy that would see the company begin import and sale of “must-have, iconic vehicles”, including Mustang coupe.
“Despite these efforts, we have not been able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing,” Mehrotra said.
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