Ford India: The company’s decision to shut down the Ford India plant will create difficulties for the employees and dealers.
Ford India: Automobile maker Ford India’s decision to stop manufacturing at two of its domestic plants has put employees and dealers in trouble. Apart from around 4,000 Ford employees, another 40,000 employees working in dealerships are expected to be affected by the company’s restructuring.Also Read – After Maruti, now Ford India has also announced, prices will increase by Rs 35,000 from January
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Ford has two plants in India – one near Chennai and the other in Sanand, Gujarat. Also Read – New Ford Endeavor SUV 2016 launch in India | Ford launches new Endeavor SUV with attractive features
However, it will continue to provide parts, service and warranty support to customers in India. It will also expand its city-based Ford Business Solutions team and bring some of its global vehicles and electrified SUVs to market.
“As part of the plan, Ford India will cease vehicle assembly at Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022,” a company statement said.
According to Ford India, accumulated operating losses of over $2 billion over the past 10 years and non-operating assets of $0.8 billion in 2019 need to be restructured, which is expected to create a sustainably profitable business in India.
The sale of existing products such as Figo, Aspire, Freestyle, EcoSport and Endeavor will cease after the existing dealer inventory is sold out.
Ford India will start importing and selling various models including the Mustang Coupe.
Jim Farley, President and CEO of Ford Motor Company, said, “As part of our Ford Plus plan, we are taking difficult but necessary actions to deliver a sustainably profitable business over the long term and to channel our capital into the right areas. are allocated to grow and create value.”
“Despite significant investments in India, Ford has posted an operating loss of over $2 billion over the past 10 years and demand for new vehicles has been significantly weaker than forecast,” he said.
Ford India said it took these restructuring actions after examining several options, including partnerships, platform sharing, contract manufacturing with other OEMs and the possibility of selling its manufacturing plants, which are still under consideration.
Anurag Mehrotra, Chairman and Managing Director, Ford India said, “Despite these efforts, we have not been able to find a sustainable path to long-term profitability that includes manufacturing vehicles in the country.”
“The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market,” he said.
Ford India said, “About 4,000 employees are expected to be affected by the restructuring. 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 minimize the impact of the decision.”
Ford India will maintain a small network of suppliers to support engine manufacturing for export and will work closely with other suppliers to ensure smooth running of vehicle manufacturing.
A union official told IANS on the condition of anonymity, “The company has decided to shut down two of its Indian plants. The management has not spoken to us about our future. Maybe on Monday the officials will talk to us.”
Federation of Automobile Dealers Association said that the auto retail fraternity is “shocked” to know about Ford India’s announcement.
Association President Vinkesh Gulati said, “Ford India President and MD Anurag Mehrotra called me personally and assured that they will adequately compensate the dealers who continue to offer vehicle service to the customers.”
(With IANS Inputs)