Ford India offers final settlement offer to Chennai plant workers
Ford India has made a “final” settlement offer to the workers of its Chennai plant, offering a deadline of September 23, 2022 for acceptance. The US automaker, which announced its plan to stop manufacturing cars in India last year, has been in persistently unsuccessful negotiations with the Chennai Ford Employees Union (CFEU) over a severance package for plant employees. Now, Ford has submitted its final termination package to the Chennai Automobile Plant Association, and the company said it will be valid from September 5, 2022 to September 23, 2022.
In its official statement, Ford India said, “The company has always taken care of its employees and has taken steps to assist them to the extent possible. Unfortunately, the company’s attempts to negotiate a fair termination package have yielded no results due to the unreasonable union demands (average of 215 days equivalent wages). per full service year). The union also failed to recognize that no company decided to stop production due to large accumulated losses and there is no sustainable path that can meet these demands.”
Termination packages will range from a minimum amount of Rs. 33 lakh to a maximum of Rs. 85 lakh, which is a cumulative class average of Rs. 41 lakh per employee.
Instead, Ford was trying to find a suitable buyer for the plant, however, since that hadn’t happened yet, the automaker decided to put forward a final employee separation settlement offer. Ford India says the settlement on average equates to 130 days of gross wages for each completed year of service. Termination packages will range from a minimum amount of Rs. 33 lakh to a maximum of Rs. 85 lakh, which is a cumulative class average of Rs. 41 lakh per employee.
Read also: Ford India resumes production for export at its Tamil Nadu plant
Ford says, “The final severance settlement offer translates to an average of about 4.6 years or 56 months’ salary per employee (from a minimum of 3.5 years, i.e. 43 months to a maximum of 8 years, i.e. 100 months), thus ensuring employees with a cushion Sufficient finances and sufficient time to decide on the following action.The Company strongly encourages employees to accept and subscribe to the final termination settlement offer, which is valid from September 5, 2022 to September 23, 2022, for themselves and their future family.Moreover, employees who take Offer final termination settlement until September 30, 2022.”
After the deadline, Ford says that if the company lays off employees and pays statutory compensation, employees will only be entitled to severance pay for 15 days out of each full year of service.
Read also: Tata Motors acquires Ford India’s Sanand plant for Rs. 725.70 crores
Ford India failed to find a buyer for the Chennai plant, unlike the successful deal it signed with Tata Motors for the Sanand plant.
Earlier in August 2022, Ford India signed a Unit Transfer Agreement (UTA) with Tata Passenger Electric Mobility Limited (TPEML) to acquire its former manufacturing plant in Sanand, Gujarat. The agreement covers the entire land and buildings, the vehicle manufacturing facility as well as the machinery and equipment contained within it. It also includes the transfer of all eligible Ford India employees working at the Sanand plant to Tata Motors. The Indian auto giant has acquired the facility from Ford for an amount of Rs. The company said in a statement, Rs 725.7 crore excluding taxes. The two companies signed a tripartite memorandum of understanding on May 30, 2022.