Ford’s Existing Plants In Tamil Nadu Can Be Used To Manufacture Electric Cars; State Govt Leading Negotiations

The Tamil Nadu government and Ford Motor are in talks to repurpose the latter’s Chennai plant for manufacturing and exporting electric vehicles (EV).

Discussions

The automaker has global plans to enter the EV market.

The talks have centred on the future of the plant, the company’s large business and technology services office in Chennai, and its workers.

A Ford executive said that it has set up a “mechanism” to provide regular updates to the government.

Leaving India

Last September, Ford announced its exit from the Indian market, citing accumulated losses of $2 billion in the country.

It plans to wind down assembly operations at the Chennai plant by the second quarter this year.

Ford had said earlier that it is exploring the option of using the India plant as an export base for EV manufacturing.

Other Bidders

An executive said that the company was “working on plans for its India factories” along with the EV plans.

The plant has attracted offers from domestic firms such as Mahindra & Mahindra and Ola Electric.

The TN government had also hosted other companies at the plant as part of efforts to keep the jobs of more than 2,600 people at the plant.

PLI Scheme

Ford had, along with others, qualified for production-linked incentives for EVs.

Others who also qualified include Hyundai, Ashok Leyland, Eicher Motors and Tata Motors.

The incentives go up to 18% of the cumulative investments.

Now that Ford has become eligible, government officials have become interested in turning the Chennai plant for EVs.

Workers’ Livelihood On Balance

Ford holds the land of its factory as a ‘freehold’, unlike others which sit on 99-year land leases, state government officials said.

So even after they stop manufacturing, the land continues to belong to them. 

An employee at Ford’s Chennai factory said workers are awaiting a response from the management on the proposed conversion of the plant for EVs.