CHENNAI: Workers at Ford’s Chennai manufacturing facility approached Rural Industries Minister, TM Anbarasan, on Saturday seeking the State government’s intervention in the crisis precipitated by the US auto manufacturer’s recent announcement that it would exit India. The workers asked the State to make a statement in the Assembly on Monday, providing an assurance that their jobs would be protected.
According to Senthil Kumar, general secretary of the Chennai Ford Employees’ Union, the minister said he will pass on the request to Chief Minister MK Stalin. The union said 4,000 persons, including 2,600 permanent employees, stand to lose jobs if the company closes the unit by second quarter of 2022 as announced.
Meanwhile, 170 auto dealers across India are also in a fix as Ford has asked them to sign a non-disclosure agreement. Those unwilling to sign it may not be included in compensation-related talks. “This has resulted in dealers talking to their legal counsel.
We are also working on it,” said Vinkesh Gulati, president of the Federation of Automobile Dealers Association (FADA). “The issue is to mitigate the losses dealers have undergone. If the compensation is fair, negotiations will go on without an issue, else we will have to put pressure,” he said.
Ford dealers’ forum wants Centre to enact legislation to control such exits
"We have also written to Anurag Mehrotra, Ford India President and Managing Director, that we are not interested in one on one discussion, but in a broad way on how the compensation is being worked out," he added.
FADA said the dealers operate 391 outlets with an investment of Rs 2,000 crore and hold about 1,000 Ford vehicles at present. Gulati said it would take a couple of months to discuss with each dealer and understand how to compensate them. "They will have some calculation based on the investment at the dealer facility, depending on the make of the showroom and the years they have put in," he said.
The dealers forum is also approaching the Ministry of Heavy Industries for some regulation to control such exits. It is learnt that FADA has been requesting the Union government to roll out a Franchisee Protection Act, in the absence of which dealers are not adequately compensated like their counterparts in Mexico, Brazil, Russia, China, Indonesia, Malaysia, Japan, Italy, Australia, Sweden, and many other countries, where the law exists.
The Parliamentary Committee on Industry, in its report which was released in December 2020, had recommended to enact the legislation, so that it is a win-win for both, the auto Original Equipment Manufacturers (OEMs) and the dealers. Ford India is the fifth biggest exit from Indian markets since 2017, after General Motors, Man Trucks, Harley Davidson, and UM Lohia.