Employees and dealers of Ford India will not let the company go ahead with plan for a complete shutdown of operations. They said the decision will impact thousands of employees directly and indirectly.
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. He highlight that the American carmaker 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.”
Saharsh Damani, FADA CEO, told The Sunday Express that Ford 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, manpower issues. Then many dealers will not want to continue,” he said. “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 pointed out that all developed markets have a Franchise Protection Act. “Once this Act is there, companies can’t abruptly exit. They have to give significant 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 like 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.”
The FADA, in a statement, revealed that there are 170 dealers and 391 outlets with an investment worth Rs 2,000 crore. It said 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.”
Ford is looking at halting its vehicle and engine manufacturing in Chennai by the second quarter of 2022. R Suresh of Chennai Ford Employees Union said there are two categories of staff, including hourly paid technicians and salaried. “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.”