Ford announced that it has decided to stop its operations in India. After this news employees and dealers of the company have decided to challenge the plan for a complete shutdown.
After only leaving ‘Ford Business Solutions’ to operate in the country. Ford India’s decision to stop manufacturing and making vehicles for sale in India will immediately be going to affect thousands of employees directly and hundreds of others in related sectors, they said.
The Ford’s move to stop vehicle assembly at its plant in Sanand, Gujarat, by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022, Vinkesh Gulati of the Federation of Automobile Dealers Associations (FADA) told The Sunday Express that the government should immediately step in and force Ford India to continue services for a period that matters to vehicles it has sold.
Ford India has promised to adequately compensate dealers who continue their services for vehicle owners. “But that promise is not going to compensate for the huge investments made by dealers. Ideally, the government should step in and ensure that the company continues their services for a deserving period, as they are still selling their vehicles in India,” Gulati said.
FADA CEO Saharsh Damani told “Ford has certainly said they will continue service support, but once you stop India operations there is a big question mark. Companies leaving India say such things, but it does not work in the long run because there are spare parts issues and manpower issues. Then many dealers will not want to continue.”
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He said, “All developed markets have a Franchise Protection Act. Once this Act is there, companies can’t abruptly exit. They have to give sufficient time and suitable compensation. Dealership agreements then will have a long-term vision. It takes around Rs 5-6 crore to set up a Ford dealership in India. There is specific Ford-related hardware and infrastructure that is of no use once you are not associated with the brand. Dealers are SMEs and family-run partnerships, and this will be the biggest loss in their entrepreneurial career. Ford has 4,000 employees, the dealers have 40,000 employees.”
There are 170 dealers and 391 outlets according to FADA. The investment is worth Rs 2,000 crore. “While Ford India employs 4,000 people, dealerships employ around 40,000 people. Ford India dealers currently hold 1,000 vehicles, which amount to Rs 150 crore via inventory funding from reputed Indian banks. Ford India also appointed multiple dealers until five months back. Such dealers will be at the biggest financial loss in their life,” the organization said.
“There are mainly two categories (of staff), including hourly paid technicians and salaried,” Suresh said. “There are 2,635 technicians in Chennai alone — mostly diploma-holders with an average salary of Rs 55,000. Salaried categories include engineers and those in other senior positions, whose salaries start from Rs 80,000. About 350 of them are in Chennai,” he said.
“We will not accept anything less than jobs. We will not accept this shutdown; we need jobs,” Suresh added.