American car major Ford Motor Co is not the only car-maker that's reviewing its operations in emerging markets nor is Ford the first car-maker to drive away from India. But one thing these exits have in common is that they have left thousands of workers in the lurch a situation that now seems to be snowballing into a protracted court battle.
Ford and General Motors steered a course for India in the hope they could capitalise on a growing aspirational middle class, and the export opportunity the country provided. They even saw some initial success, but the Indian dream of these American companies has not quite worked out as planned.
While General Motors stopped selling in India in 2017, Ford had announced plans to wind up a large portion of its manufacturing operations in the country. Both companies said they were unable to break into India's mass market and with losses mounting, an exit is the only option.
General Motors shut operations at its Talegon plant in Maharashtra plant last year. Last month, Ford said it will stop manufacturing activity at its Tamil Nadu and Gujarat facilities. Both shutdowns have resulted in around 5,000 people employed at these plants staring at an uncertain future. Also, employees are not happy with the decision, or the compensation on offer. There's another similarity in how these stories are playing out.
GM retrenched over 1,000 employees after unionised plant workers refused to accept the company's voluntary separation package. After talks broke down with the management wielding the VSS and employees asking for employment with the new owners of the GM plant, the employees union went to court and is currently claiming their retrenchment was unlawful.
Ford has been in talks with workers at its Chennai plant for over a week now, but these discussions have not borne fruit so far. The union is sticking to its demand that workers be given alternate employment. If the impasse continues, the Chennai Ford employees union said it will consider taking the car-maker to court.
So this tussle may also head to the courts soon and with more American auto giants looking to consolidate operations and shut down loss-making ventures as they prepare to face off with Chinese competition on their home turf, one can expect to see more such standoffs with labour unions, report Jude Sannith and Alisha Sachdev.
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