CHENNAI: The future of 3,300 employees working at Ford India’s vehicle manufacturing plant at Marimalai Nagar looks bleak as the company has announced shutting the plant next year, reportedly without keeping employees in the loop.
“They shut down operations this week citing semi-conductor shortage. Now, all of a sudden, they announced shutting operations in second quarter of 2022,” said Selva, a production associate with Materials Planning Division. “They knew they were going to make this announcement; they declared a holiday so we don’t stage a protest,” he said, adding that it was just the previous week that he got a raise in the salary.
“The contract was for only one year this time. We smelled something fishy as we usually got a three-year contract,” he said. On whether they suspected the plant to be sold, the employees said there were rumours that the company was going for tie-up or sale of the plant. “But, we never expected they would shut down operations. How could they announce such a decision without consulting with employees?” questioned one.
“There are around 2,700 workers and technicians and another 600-odd staff at the Chennai facility across departments. The company has announced that they would speak to the unions regarding any planned settlements or winding-up procedures. But, union’s only request at this juncture is that the livelihoods of these 3,300 people be protected,” says a union leader.
According to union sources, the average wages of a technician is around Rs 50,000-55,000 a month, while the staff draw an average monthly salary of around Rs 80,000. The closure is likely to impact 30,000-40,000 families, including those of suppliers.
Impact on MSME sector
Many Micro Small and Medium Enterprises (MSMEs) units supply car parts like upholstery, leather, dash boards, clutches, brakes, gear boxes, switches, meters, screens, cushions, lights, PVC supplies, cables, hand brakes, bushes, fasteners, tyres, handles, and paints to the car manufacturer expressed concern about the closure of the plant.
K E Raghunathan, convenor, Consortium of Indian Associations, said the State has been hit hard with this decision as it is known as a hub for many auto giants. “The whole infrastructure built for exports and logistics will be hit too. Service providers such as canteen workers, hotels, uniform suppliers, and house owners will all lose their revenue with this decision,” he said.
Meanwhile, a sales executive of Ford in Madurai claimed that problems for Ford India began at the Sanand (Gujarat) plant. “At the Gujarat plant, certain components were allegedly replaced with cost-effective alternatives. Thereafter, the business began to crumble,” he claimed.
Speaking on the future of the brand, a dealer in Madurai said that Ford’s exit from India does not mean its cars would not be available. “In Madurai alone, 140 bookings are due for delivery. The vehicles would henceforth be shipped from other countries, potentially Thailand, due to lower import duty. As a result, a hike in prices can be expected,” he said.
Between January 2020 and September 2021, about 60 per cent of the staff have already been laid off; only the minimum required strength is on roll now, the executive said. Ford is likely to have its presence in India for a decade.
With inputs from Jonathan Ananda and Lalitha Ranjani.