The General Motors (GM) which set up Gujarat's first car manufacturing facility at Halol near Vadodara is all set to shut it down sometime in April. The Indian subsidiary of US automobile giant had in July 2015 announced closure of the facility by mid-2016. Later, the company decided to continue production till March 2017 to ensure an orderly transition for employees, suppliers and other stakeholders.
“The plant will cease to function after the March 2017 deadline. The exact data for closure has not been decided yet but it is unlikely to remain operational for more than two weeks or so after the deadline,” said sources. Top officials from the company recently held a meeting with senior government officials to discuss the exit modality after majority of 650-odd workers at the plant not accepting Voluntary Separation Scheme (VSS) offered in December, which promised 100 days of wages to the workers.
“GM has decided to close their plant as per their business decision. The state government has allowed the company to wind up its operation on the assurance that they would resolve all issues related to workers,” said JN Singh, chief secretary, Gujarat government.
“A month ago, we were offered voluntary separation scheme, which we (the workers) have opposed. As against Rs 3500,000-4000,000 offered to supervisors, the workers have been promised just Rs 800,000-1000,000,” said a worker. The company, however, continues its negotiations to sell certain assets of the facility to Chinese automobile giant SAIC Motor Corp. When contacted, the company stated that the discussions with SAIC on the sale of Halol are progressing well. The company continues to work with its employees on the implications of a sale and with the government to secure necessary approvals. The Competition Commission of India (CCI) has also approved the acquisition of certain assets of GM's Halol plant by SAIC Motor HK, a part SAIC Motor Corp. Meanwhile, SAIC is also said to be in talks with state governments of Maharashtra, Andhra Pradesh and Gujarat for a greenfield car plant.
GM's exit has come at a time when Gujarat has emerged as an auto hub with the likes of Tata Motors, Ford India and Honda Motorcycle & Scooter India Pvt Ltd (HMSI) already commissioning their manufacturing plants in Gujarat. Suzuki Motor Corporation (SMC) is soon going to operationalize its plant, while HeroMoto Corp's two-wheeler facility is under advance stage of development.
