The multinational will close manufacturing operations in India, eliminate more than 4.000 jobs and may end production of the Ford Ka and EcoSport.

Ford India announced on September 9 that it will shut down its car manufacturing operations in India, closing two factories in Maraimalainagar, a suburb of Chennai, in the state of Tamil Nadu, and in Sanand, in the state of Gujarat. As a result, more than 4.000 full-time Ford workers will lose their jobs. In addition, several thousand interns, contract workers, canteen 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 could mean the end of the Ford Ka and EcoSport.

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After the end of Brazilian production, markets such as Argentina, which received the national car, began to import the EcoSport from India, which continued with the production of the SUV and the Ka, sold there as Figo. The Indians were also responsible for producing the EcoSport for other markets.

Multinational factory closure in India may signal the end of Ford KA and EcoSport.

In a statement, Ford spokeswoman Sinead Phipps said the company will stop making vehicles for sale in India that include Figo, Aspire, Freestyle, EcoSport, KA and Endeavor, immediately. Once supplies of these vehicles are sold, there will be no further sales in India.

Manufacturing of some of these vehicles will continue for export at the Sanand plant, until it closes in late 2021, and Chennai, where the vehicle and engine plants are scheduled to close in mid-2022.

The impact of Ford's exit will extend to hundreds of car dealerships, which employ 40.000 people across the country, ancillary industries, MSMEs (micro, small and medium-sized enterprises) that have supported the factories until now. Chennai, known as the “Detroit of India”, will be hit particularly hard.

End of thousands of jobs.

As a result of the Ford closures, KE Raghunathan, Coordinator of the Consortium of Indian Associations (CIA), said, “More than 4.000 SMEs (Small and Medium Enterprises) will be closed”. He added: “Tamil Nadu is hardest hit by this decision as it is known as the home base of many automotive giants. The entire infrastructure created for the export of vehicles and for the logistics sector will also be affected”.

Raghunathan warned that an estimated 10.000 – 15.000 other workers could be out of work due to the impact on SMEs. While cutting thousands of hourly jobs, Ford plans to "significantly expand" the number of software engineers, IT specialists, research, analytics, engineering and finance staff in India.

The country is already home to Ford's second-largest salaried workforce, after North America, and it hopes to expand its use of lower-wage skilled workers to support its global business operations.

Brazilian market also suffers impacts.

Ford is the latest US vehicle manufacturer, after General Motors (GM) and US motorcycle company Harley-Davidson, to halt production in the world's fourth-largest auto market 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 pro-investor economic reforms began in 1991. Announcing its decision to withdraw, corporate executives said, “despite investing significantly in India, Ford has accumulated more than $2 billion of operating losses over the last 10 years and demand for new vehicles has been much weaker than anticipated.”

In January, Ford announced plans to close operations in Brazil, closing three plants and eliminating more than 5.000 automotive jobs in the Latin American country. In March 2019, the company announced plans to cut 25.000 jobs worldwide, including 12.000 in Europe and over 5.000 in Germany alone.