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As Ford takes the exit route from India, dealers urge govt to step in

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Days after Ford announced its decision to prevent operations in India, employees, and dealers of the corporate have decided to challenge the plan for an entire shutdown.

Leaving only ‘Ford Business Solutions’ operational within the country, Ford India’s decision to cease manufacturing vehicles purchasable in India immediately will affect thousands of employees directly and many others in related sectors, they said.

Reacting to Ford’s move to prevent 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 govt should immediately step in and force Ford India to continue services for a period that matters to vehicles it’s sold.

Gulati said Ford India has promised to adequately compensate dealers who continue their services for vehicle owners. “But that promise isn’t getting to catch up on the large investments made by dealers. Ideally, the govt should step in and make sure that the corporate continues their services for a deserving period, as they’re still selling their vehicles in India,” Gulati said.

FADA CEO Saharsh Damani told The Sunday Express: “Ford has certainly said they’re going to continue service support, but once you stop India operations there’s an enormous interrogation point. Companies leaving India say such things, but it doesn’t add the end of the day because there are spare parts issues, manpower issues. Then many dealers won’t want to continue.”

FADA said it’s already flooded with distress calls from worried dealers. “This will impact dealers, dealership employees, and their families. Outside auto retail, component manufacturers who supply Ford in Gujarat and Tamil Nadu will feel the impact,” Damani said.

He said: “All developed markets have a Franchise Protection Act. Once this Act is there, companies can’t abruptly exit. they need to offer sufficient time and suitable compensation. Dealership agreements then will have a long-term vision. It takes around Rs 5-6 crore to line up a Ford dealership in India. there’s specific Ford-related hardware and infrastructure that’s of no use once you’re not related to the brand. Dealers are SMEs and family-run partnerships, and this may be the most important loss in their entrepreneurial career. Ford has 4,000 employees, the dealers have 40,000 employees…”

According to FADA, there are 170 dealers and 391 outlets with an investment 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 are going to be at the most important loss in their life,” the car organisation said during a statement.

While many Ford employees in Chennai were reluctant to speak, as they were still unaware about the company’s move regarding their jobs and possible compensation packages, a minimum of two Ford engineers said they’re still expecting a communication about their future. “Either they’re going to be laid off, or a couple of could also be retained as a part of ongoing projects in overseas plants. we’ve to attend and see,” one among them said.

R Suresh of Chennai Ford Employees Union said they’ll get a transparent idea about the company’s plan once they meet company representatives Monday.

“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 a mean salary of Rs 55,000. Salaried categories include engineers and people in other senior positions, whose salaries start from Rs 80,000. About 350 of them are in Chennai,” he said.

“We won’t accept anything but jobs. we’ll not accept this shutdown; we’d like jobs,” Suresh added.

NDA ally and Pattali Makkal Katchi (PMK) leader S Ramadoss has also asked the state and Central governments to carry talks with the Ford management to probe options to continue their operations. Ramadoss also cited the Maharashtra government’s decision early this year to reject General Motors’ proposal to shut down its Talegaon plant despite a compensation offer.

At Harpreet Ford, an outlet in Delhi’s Moti Nagar, Jitender Sadana, a sales representative, said cancellations have started since Thursday, the day Ford India released a video message from its country head, Anurag Mehrotra, stating that “we are going to be working closely with our dealers”.

Sardana, 44, who has spent 24 years working with Ford, however, said he doesn’t know what lies ahead.

Damani said: “This happened just before Ganesh Chaturthi. There have been tons of backlash from customers. Around 400 vehicles across India that were thanks to being delivered on this auspicious day couldn’t get delivered because customers are jittery. In fact, there are tons of consumers who had confirmed bookings but now need a refund. Customers don’t skills Ford will continue servicing their vehicles.”

Sunil Tandon, an executive at Harpreet Ford, said, “We have multiple dealerships with other car manufacturers in our dealership bouquet, so we’ll attempt to absorb the maximum amount as we will. I can’t say an equivalent for little dealers. The service section will continue, but the sales division is that the worrying part. we’ll ask Ford. it’s surreal that we began operations on September 9, 1996, and Ford’s announcement came an equivalent day, 25 years later.”

 

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