Ford drops plans of making EVs in India; confirms exit

Around 4,000 employees of Ford working at its factories in Maraimalainagar and Sanand are likely to lose their jobs

Global automobile giant Ford has abandoned plans to manufacture Electric Vehicles from its India plants – Maraimalai Nagar and Sanand – after a “careful review”, a development that signals the company's exit from the Indian market as announced in September last year.

The company will now resume settlement talks with its employees at the two plants, which had been paused after Ford applied for production-linked incentive to manufacture EVs in India. Ford, one of the first global auto giants to set shop in India in the 1990s by building a massive production unit near Chennai, had in September 2021 announced shutting down of its manufacturing facilities in India, blaming accumulation of operational losses for its decision.

The company was then involved in talks with various auto majors, including Tata Group, for selling the plants. However, Ford sprung a surprise a few months ago by applying for the Centre's PLI scheme which was approved.

“As part of the ongoing business restructuring in India, Ford has continued to explore possible alternatives for its manufacturing facilities. This included applying for the production-linked incentives scheme, which allowed us to explore utilizing one of the plants as a potential EV manufacturing base.

“After careful review, we have decided to no longer pursue EV manufacturing for exports from any of the Indian plants. We remain grateful to the Government for approving our proposal under the Production-Linked Incentives and for being supportive while we continued our exploration,” a Ford spokesman said.

The decision was conveyed to the employees at the Maraimalai Nagar plant on Thursday. “We were informed that Ford will not convert the facility into an EV plant. We had suspended the settlement talks with the management after the application for PLI. Now that the company has gone back on its plans, we will resume the talks soon,” P Senthil Kumar, general secretary of the Chennai Ford Employees Union, told DH.

The Ford spokesman said the company's previously announced business restructuring continues as planned, including exploring other alternatives for our manufacturing facilities. “We continue to work closely with unions and other stakeholders to deliver an equitable and balanced plan to mitigate the impacts of restructuring,” the spokesman added.

The company will wind down the vehicle and engine manufacturing in Chennai by the second quarter of 2022. Around 4,000 employees of Ford working at its factories in Maraimalainagar, 35 km from here, and Sanand in Gujarat are likely to lose their jobs due to the company’s decision to cease manufacturing of vehicles.

The entry of Ford, one of the iconic automobile brands of the US, into Chennai laid the foundation stone for the city emerging as India’s very own Detroit. After Ford came to Chennai in 1995, top car makers like Hyundai, Renault-Nissan, BMW, and others flocked to the city making it an automobile hub of the country.