Curtains down at Ford's Chennai plant, last car rolled out amidst emotion and anger

 

Picture source: Samuel Iyadurai, HR manager, Ford

At Ford India's manufacturing facility near Chennai, on Wednesday, cross section of employees were emotionally affected, while the other set were angry as the US automajor rolled out the last car from the production line.

A human resources manager of Ford took a picture with the final car came out of the Chennai Ford car Plant, while on the other side protesting employees, who lost jobs, were still upset about the closure and compensation.

Samuel Iyadurai, Human Resources Manager at Ford, in his social media account uploaded his picture with the last car, which was rolled out from the factory.

"I was feeling emotional after the final car came out of the Chennai Ford car Plant. The legacy of 25 years comes to an end at the Chennai Plant. Since I have been associated with the Chennai plant for the past 11 years, I can also understand other employees' feelings as well. Fantastic team, fantastic product, fantastic workplace, and even better work culture. We all miss you, Ford. #team #work #culture #ford."

Recalling Ford's entry in TN

Tamil Nadu since 50s established a good automobile component base, thanks to the late Chief Minister K. Kamaraj's vision automobile component companies led by the TVS and Amalgamations, Rane, Murugappa groups among others came up. The state now accounts for a third of the auto component sector in India.

When Ford was contemplating setting up a factory in India back in early 90s, Tamil Nadu administration led by then Chief Minister J Jayalalithaa and auto component sector worked together to woo the American multinational. But it was not an easy task considering back in 1995, Ford was in an alliance with the Mahindra Group for its India operations with the joint venture company called Mahindra Ford India Ltd. M&M was pushing for the plant to come up in Maharashtra, which was its home base.

Ford, on the other hand, was keen to explore options and evaluated various locations on as many as 40 parameters, according to reports including availability of skilled manpower, social infrastructure, support from the local government and overall industrial climate.

People who have tracked the company and retired Government officials have said that what worked in Tamil Nadu’s favour was probably late Chief Minister Jayalalithaa's decision to ensure Chennai should be the home for Ford India.

She handpicked N. Narayanan, Finance Secretary; C. Ramachandran, Industries Secretary; S. Arvind, Chairman and Managing Director, Tamil Nadu Industrial Development Corporation (TIDCO), the State Government agency tasked with industrial promotion; and, M. Raman, Director, Industrial Guidance and Export Promotion Bureau.

One of the officials, who worked in the project, recalled the sleepless night he used to spend at his office. "For 2 days we used to work without sleep, proper food. It was not an easy task as the State did not had any big foreign OEMs like other states, general impression was the state is not industry friendly, corruption, red tape etc.,"

But, the strong auto component eco-system, trained human resources, infratructure including airport and sea port have worked in their favour.

A journalist recalled how the news was broke. After meeting with Jayalalithaa and her team. A senior executive from Mahindra & Mahindra then told waiting journalists that “we have lost it!” The Ford team was simply overwhelmed and awestruck with Jayalalithaa’s flawless English and the style with which she served refreshments to the delegation.

The Tamil Nadu Government came up with an attractive package of incentives, including sales tax waiver/deferral to woo Ford, through a new policy for projects with investments exceeding Rs 1,500 crore.

The Government Order itself for this package of incentives was issued on January 2, 1996, just a day before the Government signed an agreement with Ford for the plant at Maraimalai Nagar, about 35 km south of Chennai.

There were tough negotiations for a year, but the Tamil Nadu Government worked everything out and Ford came to Chennai (then Madras). The factory was set up in 1995.

Ford led other OEMs

The fact still remains that it was because of Ford that Tamil Nadu attracted other OEMs and now part of the global auto industry map. After Ford, the Korean car company, Hyundai, Nissan, Renault, Daimler, BMW, Yamaha among others who choose Tamil Nadu has home for manufacturing along with home grown companies including TVS, Ashok Leyland, Royal Enfield, TAFE, Mahindra among others.

According to Guidance Tamil Nadu, a nodal agency for Tamil Nadu Government to promote investments, the state is one of the top 10 Automobile Hubs in the World, number 1 in Tyre Manufacturing.

Chennai has an annual installed capacity to produce 1.71 million units of Vehicles, over 200 Automobile Engineering Colleges and 800+ Electronics Engineering Colleges in the State

Home to major OEM companies like Hyundai Motors, BMW, Daimler, Renault-Nissan, Ford Motors, Ashok Leyland, TVS Motors & Yamaha Motors

Ford’s curtain down

Ford had announced that it will stop selling cars in the Indian market on September 9, 2021. Sanand facility in Gujarat was the first to shut shop as the models produced there – the Figo and Aspire – were slowly taken off the shelves not just in India, but overseas too due to lesser demand and end of product life.

Ford had announced that by Q2 2022 it will be closing down its manufacturing facilities altogether in India, and hence, won’t be producing models for export either. Although the brand had announced that it will continue to rely on India-based suppliers for parts for its global products.

Ford’s first plant in India, the Maraimalai Nagar facility, near Chennai, rolled out its last car on Wednesday.

The facility was one of the major manufacturing facilities for the Ford EcoSport, and the carmaker continued manufacturing the EcoSport for overseas markets even after ending sales of its cars and SUvs in India. The made-in-India EcoSport was exported to several countries including the United States.

Reasons behind decision to stop operations in India include lower capacity utilisation due to lower demand, which led to heavy loss for the company.

Both facilities, which can together produce more than 4 lakh units annually, were only managing 80,000 cars (around 20 percent of the capacity), with half of those being export.

Ford also confirmed that the brand has accumulated over $2 billion (around Rs 16,000 crore) in operating losses over the past 10 years and demand for new vehicles had been weaker than forecasted.

Ford has shelved plans to manufacture electric vehicles in India for exports despite getting approval from the government for production-linked incentives.

Time to say bye to Ford....

ends