Ford India Pvt. Ltd. has concluded negotiations on severance package with the employees at its manufacturing plant in Chennai, a year after the US carmaker ceased India operations.
Ford India's Transformation Officer Balasundaram Radhakrishnan handed over the updated settlement agreement to office bearers of the Chennai Ford Employees Union representing the 2,592 employees on Friday, a statement from the company said.
"The severance settlement agreement, signed between Ford and the Union today (Friday) is an important milestone and a win-win for everyone involved," Radhakrishnan said. "I thank the team at Ford as well as the Chennai Ford Employees Union for negotiating in good faith and arriving at a settlement outcome that keeps the best interest of employees."
The company, in view of the forthcoming festive season, has also decided to pay an additional amount equivalent to one month of gross wages as a sign-on benefit for employees who complete the exit process by Oct. 14.
Accordingly, the final settlement package is an average equivalent of 140 days of gross wages per completed year of service and additional Rs 1.50 lakh lumpsum per employee translates to an average of about 62 months of salary for each employee (49 months to a maximum of nine years or 108 months) guaranteeing an adequate financial cushion and time for each employee to chart their future career.
The last date of employment for all Ford India employees was Sept. 30. The company is notifying the employees on the next steps for an exit.
"We thank our employees in advance for their patience and support in the process and remain grateful to the Tamil Nadu government and labour department officials for guidance," Radhakrishnan said.
In July, Ford India rolled out its last car formally produced at the facility at Maraimalai Nagar, about 45 kms from Chennai, that has been operational for more than 25 years.
The workers had staged a protest seeking better pay soon after the US carmaker announced that it would stop production at its two plants -- Sanand in Gujarat and Maraimalai Nagar in Tamil Nadu -- as part of its restructuring exercise. Ford also shelved plans to manufacture electric vehicles in India for exports despite getting approval to do so under a production-linked incentive.
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