After Ford India announced that it will no longer be manufacturing cars in India, employees of Ford in India faced unemployment on a massive scale. The closure of the company’s wing in India will result in the loss of up to 4,000 jobs for factory workers, of which more than 2,600 are permanent workers and over 1,000 are contract staff. The shutdown will also affect the ancillary companies that supply smaller components and auto parts for Ford. This leaves the micro, small and medium enterprises as well as the employees, looking at an uncertain future. In a move to save their jobs, Ford Motor Company factory workers at the South Indian plant near Chennai city have written a letter to the state government asking them to help safeguard the jobs, according to a report by Reuters.
The company itself is shutting down the Indian branches because of the sheer scale of unprofitability that it has faced. The losses amount to around $2 billion. Ford had initially entered the market with the idea that India held untapped potential but the results thus far have not been able to deliver on that vision. The company plans to shut down its operations in Sanand, Gujarat first by closing that factory by the fourth quarter of this year. The Chennai plant, on the other hand, is looking at a possible closure date somewhere in 2022, after which only imported vehicles will be sold.
Chennai Ford Employees Union said in a letter dated Sept. 11 addressed to Tamil Nadu state minister T M Anbarasan, that thousands of workers were at risk of losing their jobs as a result of Ford’s decision to shut the Chennai factory according to the Reuters report. The union also asked Anbarasan to ensure that the livelihoods of the workers be safeguarded, where they can at least earn some money.
Parallelly, another union in Chennai, the Centre of Indian Trade Union (CITU), organised a protest against the company’s management as well as the government for this sudden turn of events. The protest took place on Monday. The secretary of the CITU told Reuters that the government has to step in and stop this. The unions brought into question the ‘Make in India’ movement that was started by Prime Minister Narendra Modi, who had promised more manufacturing jobs in India.
It should also be noted that the Union had asked Ford’s management to shift the workers to another production unit so they do not go completely unemployed. It was reported that employees expressed their wishes to work for minimum wage, rather than opt for the severance package, as per a report by the News Minute. This would indeed help the workers in their transition, while also aiding the company in the closure process by reducing the losses and making somewhat of a turnaround.
It is a concerning trend that so many big MNC companies are exiting India at such a crucial point. In the previous year, unemployment was at an all-time high in the country as a result of the pandemic. Given that Covid-19 still rages on despite the extensive vaccination drives taking place, this level of job losses does not bode well for the workers in the manufacturing industry. However, it should be noted that Ford will continue to sell cards through imports, and will also be providing support to dealers to serve existing customers, though this does not necessarily mean good news for the plant workers who will likely face job losses.