CHENNAI: Carmaker Ford’s Marimalai Nagar plant has fallen silent as Friday was officially declared the last working day. Employees’ unions and the company management have signed an agreement to fix the severance settlement package to an average equivalent of 140 days of gross wages per completed year of service.
A statement from Ford said Chennai Ford Employees Union (CFEU), representing 2,592 hourly permanent employees, on Friday executed a settlement agreement, concluding the negotiations on the severance settlement. However, Ford did not disclose how much the package would cost the company.
“The final settlement package (an average equivalent of 140 days of gross wages per completed year of service and an additional Rs 1.5 lakh lump sum per employee) signed on Friday translates to an average of about 5.2 years’ or 62 months’ salary for each employee (from a minimum of 4.1 years to a maximum of 9 years), thus guaranteeing an adequate financial cushion and time for each employee to chart their future action. The last date of employment for all employees will be September 30, 2022, and the company is notifying employees of the next steps and looks forward to completing the exit formalities,” said Balasundaram Radhakrishnan, Transformation Officer, Ford India.
Terming the severance settlement agreement an important milestone and a win-win for everyone, he said keeping the upcoming festival month in mind, the company, as a goodwill gesture, also decided to pay an additional amount equivalent to one month’s gross wages as a sign-on benefit to employees who complete their exit process by October 14, 2022. “I thank the team at Ford as well as Chennai Ford Employees Union for negotiating in good faith and arriving at a settlement outcome that keeps the best interest of employees at heart,” said Balasundaram.
Senthil Kumar, general secretary of Chennai Ford Employees Union, was all praise for the company for hammering out the deal. “The employees are satisfied. The company has been the best one to work with. It provided us with safety and security. Any other employer would have backtracked. What can the management do? If they are not making money, they have to shut down.”
Many employees, however, stare at an uncertain future. “We have been receiving a salary of over Rs 50,000 to Rs 60,000 a month. I have been searching for a job for the past one year but couldn’t find one,” says an employee on condition of anonymity. Many say they have been struggling to land jobs.
Notably, most Ford employees have already put in over 10 years at the plant. “Now, all of them have to start a new life,” says another employee. Ford Chennai unit rolled out its last unit, a sports utility vehicle EcoSport, on July 21 ahead of closing down its plant operations by July 31. With the employees gone, the question on the ownership of land and machinery remains. “The land belongs to Ford,” says a Ford spokesperson.