Job loss and despair – What awaits fate of nearly 45,000 employees working for Ford, dealerships?

New Delhi: US auto major Ford Motor on Thursday announced that is going to shut its two manufacturing plants in India in Chennai (Tamil Nadu) and Sanand (Gujarat).

“Ford Restructures India Operations: To cease vehicle manufacturing in Chennai & Sanand; Progressively wind-down manufacturing of vehicles for export at Sanand plant by Q4 2021 & Chennai engine/vehicle assembly plants by Q2, 2022; To continue engine manufacturing for export,” tweeted Ford. 

Ford Restructures India Operations: To cease vehicle manufacturing in Chennai & Sanand; Progressively wind-down manufacturing of vehicles for export at Sanand plant by Q4 2021 & Chennai engine/vehicle assembly plants by Q2, 2022; To continue engine manufacturing for export. pic.twitter.com/E1PXmW7Rgq — Ford India (@FordIndia) September 9, 2021

The company's decision has left employees and dealers in lurch. Around 4,000 Ford employees in addition to another 40,000 employed with the dealerships are expected to be affected by the company`s restructuring.

Although responding to users, the US based car company has said that it is not exiting the country, there is no clear direction as to how the company is going to compensate for its employees and dealerships. 

“Ford is NOT leaving India. The changes we have announced today are designed to create a new, asset-light business model, which is sustainably profitable in the longer term,” Ford responding to several users on Twitter wrote.

Ford will sell only imported vehicles in the country as part of a restructuring exercise. Going ahead, it would only sell imported vehicles like Mustang in the country.

"Approximately 4,000 employees are expected to be affected by the restructuring. Ford will work closely with employees, unions, suppliers, dealers, government and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to mitigate the effects of the decision," Ford India said.

Meanwhile, The Federation of Automobile Dealers Associations (FADA) said the auto retail fraternity is "shocked" to learn about Ford India`s announcement.

"While trying to handle dealer anxiety, Ford India President and MD Anurag Mehrotra called me personally and assured that they will adequately compensate the dealers who continue to offer vehicle service to the customers," said Vinkesh Gulati, President, FADA.

Gulati said, "FADA has been requesting Government of India to roll out Franchisee Protection Act as due to its unavailability, Auto Dealers are not adequately compensated like their counterparts in Mexico, Brazil, Russia, China, Indonesia, Malaysia, Japan, Italy, Australia, Sweden and many other countries, where this law exists."

Ford India is the fifth biggest exit from Indian markets since 2017 after General Motors, Man Trucks, Harley Davidson and UM Lohia, apart from multiple fly-by-night EV players, which have already left a market that had once promised exponential growth.