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The Multinational Will Cease Manufacturing Operations in India, Eliminate Over 4,000 Jobs, and May End Production of the Ford Ka and EcoSport.
Ford India announced on September 9 that it will cease its automobile manufacturing operations in India, closing two factories in Maraimalainagar, a suburb of Chennai in Tamil Nadu, and in Sanand, Gujarat. As a result, more than 4,000 full-time Ford workers will lose their jobs. Additionally, several thousand interns, contracted laborers, cafeteria workers, and janitors will lose their jobs, along with tens of thousands of employees in supplier factories and car dealerships. In the Brazilian market, this may mean the end of the Ford Ka and EcoSport.
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After the end of Brazilian production, markets like Argentina, which received the national car, began importing the EcoSport from India, which continued production of the SUV and the Ka, sold there as the Figo. Indians were already responsible for producing the EcoSport for other markets as well.
Closure of Multinational Factory in India May Signal the End of the Ford Ka and EcoSport.
In a statement, Ford spokesperson Sinead Phipps said the company will stop manufacturing vehicles for sale in India, which include the Figo, Aspire, Freestyle, EcoSport, Ka, and Endeavor, immediately. Once the supplies of these vehicles are sold, there will be no more sales in India.
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The production of some of these vehicles will continue for export at the Sanand factory until its closure at the end of 2021, and at Chennai, where the vehicle and engine factories are scheduled to close by mid-2022.
The impact of Ford’s exit will extend to hundreds of car dealerships, which employ 40,000 people nationwide, ancillary industries, and MSMEs (micro, small, and medium enterprises) that have supported the factories until now. Chennai, known as the “Detroit of India,” will be particularly hard hit.
End of Thousands of Jobs.
As a result of Ford’s closures, KE Raghunathan, Coordinator of the Indian Associations Consortium (CIA), said, “more than 4,000 MSMEs will close.” He added, “Tamil Nadu is the most affected by this decision, as it is known as the base for many automotive giants. All the infrastructure created for vehicle exports and for the logistics sector will also be impacted.”
Raghunathan warned that around 10,000 – 15,000 other workers may become unemployed due to the impact on MSMEs. While cutting thousands of jobs by the hour, Ford plans to “significantly expand” the number of software engineers, IT specialists, research, analysis, engineering, and finance staff in India.
The country already hosts Ford’s second-largest salaried workforce, after North America, and expects to expand the use of skilled workers with lower salaries to support its global business operations.
Brazilian Market Also Faces Impacts.
Ford is the latest U.S. vehicle manufacturer, after General Motors (GM) and the American motorcycle company Harley-Davidson, to halt production in the fourth largest automotive market in the world in the last five years. In other words, tens of thousands of jobs have been destroyed in India.
Ford was one of the first global automakers to enter the Indian market after the start of pro-investor economic reforms in 1991. Announcing its decision to withdraw, corporate executives said, “despite significantly investing in India, Ford has accumulated more than $2 billion in operating losses over the past 10 years, and demand for new vehicles has been much weaker than anticipated.”
In January, Ford announced plans to close operations in Brazil, shutting down three factories and eliminating more than 5,000 jobs in the automotive sector in the Latin American country. In March 2019, the company announced plans to cut 25,000 jobs worldwide, including 12,000 in Europe and more than 5,000 in Germany alone.
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