Ford India may restart operations as factory sale deal with JSW falls through
Back in September 2021, Ford India decided to pull the plug on the Indian automotive market. However, it now seems like the company is reconsidering its earlier decision to sell its Chennai plant. This move has sparked speculation that the company could make a potential comeback to the Indian car market. The basis of this theory is that the American automotive giant recently called off a deal with the JSW Group for the acquisition of its Chennai plant.
This has left the future of its manufacturing facility in Chennai in a state of flux. In response to numerous inquiries about the possibility of a comeback, a source from Ford India has shed some light on the topic. It has been stated that “We (Ford India) continue to explore alternatives for our manufacturing facility in Chennai.” This indicates that the company is actively considering options beyond the previously planned exit strategy. Some reports have stated that the company could also utilize this plant for manufacturing and exporting vehicles from India to international markets and eventually make a return with a new portfolio of cars.
It was reported that Sajjan Jindal-led JSW Group had been eyeing the acquisition of Ford’s Chennai plant. The company was looking at this strategic move to enter the electric vehicle (EV) segment. However, the deal fell through, leading Ford India to reevaluate its options for the facility. Apart from the JSW Group, Ford India had previously engaged in talks with various automakers in the country, including Mahindra and Mahindra, and Vietnamese electric vehicle maker Vinfast. However, despite these negotiations, no concrete deals materialized.
Additionally, other major automakers in the Indian automotive market, including Ola Electric, Hyundai Motor India, Tata Motors, and MG Motor, have also been in talks with Ford India’s management over the past two years. These negotiations indicate a keen interest from these companies in leveraging the existing infrastructure and capabilities of the Chennai plant.
Ford India offered a severance package
The shutdown of Ford’s Maraimalai Nagar factory is spread over 350 acres. It has an annual production capacity of around 200,000 vehicles and 340,000 engines. This resulted in a significant severance package for its 2,592 workers. The cost of this package to Ford’s India arm amounted to approximately Rs 1,296 crore. The severance for each employee ranged from Rs 34.5 lakh to a maximum of Rs 86.5 lakh, averaging Rs 44.8 lakh per employee.
Maraimalai Nagar remains an enticing destination for investors in the automotive sector. This plant has a very strategic location, being merely 50 kilometers away from Chennai port and 74 kilometers from Ennore port. This plant offers easy accessibility for transportation. Additionally, its proximity to major cities such as Chennai and Bengaluru adds to its allure. Hence a number of buyers are in line for this plant. But Ford India’s reluctance to sell it sparks the question of Ford India wanting to make a comeback to the Indian subcontinent.
Back in September 2021, Ford India decided to pull the plug on the Indian automotive market. However, it now seems like the company is reconsidering its earlier decision to sell its Chennai plant. This move has sparked speculation that the company could make a potential comeback to the Indian car market. The basis of this theory is that the American automotive giant recently called off a deal with the JSW Group for the acquisition of its Chennai plant.
This has left the future of its manufacturing facility in Chennai in a state of flux. In response to numerous inquiries about the possibility of a comeback, a source from Ford India has shed some light on the topic. It has been stated that “We (Ford India) continue to explore alternatives for our manufacturing facility in Chennai.” This indicates that the company is actively considering options beyond the previously planned exit strategy. Some reports have stated that the company could also utilize this plant for manufacturing and exporting vehicles from India to international markets and eventually make a return with a new portfolio of cars.
It was reported that Sajjan Jindal-led JSW Group had been eyeing the acquisition of Ford’s Chennai plant. The company was looking at this strategic move to enter the electric vehicle (EV) segment. However, the deal fell through, leading Ford India to reevaluate its options for the facility. Apart from the JSW Group, Ford India had previously engaged in talks with various automakers in the country, including Mahindra and Mahindra, and Vietnamese electric vehicle maker Vinfast. However, despite these negotiations, no concrete deals materialized.
Additionally, other major automakers in the Indian automotive market, including Ola Electric, Hyundai Motor India, Tata Motors, and MG Motor, have also been in talks with Ford India’s management over the past two years. These negotiations indicate a keen interest from these companies in leveraging the existing infrastructure and capabilities of the Chennai plant.
Ford India offered a severance package
The shutdown of Ford’s Maraimalai Nagar factory is spread over 350 acres. It has an annual production capacity of around 200,000 vehicles and 340,000 engines. This resulted in a significant severance package for its 2,592 workers. The cost of this package to Ford’s India arm amounted to approximately Rs 1,296 crore. The severance for each employee ranged from Rs 34.5 lakh to a maximum of Rs 86.5 lakh, averaging Rs 44.8 lakh per employee.
Maraimalai Nagar remains an enticing destination for investors in the automotive sector. This plant has a very strategic location, being merely 50 kilometers away from Chennai port and 74 kilometers from Ennore port. This plant offers easy accessibility for transportation. Additionally, its proximity to major cities such as Chennai and Bengaluru adds to its allure. Hence a number of buyers are in line for this plant. But Ford India’s reluctance to sell it sparks the question of Ford India wanting to make a comeback to the Indian subcontinent.
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