GM India faces challenge of offering Halol plant to SAIC without workers
Ahmedabad: SAIC HK Ltd, a unit of China’s SAIC Motor Corp. Ltd, says it will buy General Motors (GM) India Pvt. Ltd’s plant in Halol, Gujarat only if the factory comes without the workers employed in it, putting the local unit of the US carmaker in a fix.
None of the 650-odd workers at the Halol plant of GM have accepted a voluntary separation scheme the company offered in December, said Rachit Soni, president of General Motors Employees Union; the scheme lapsed on Friday, he said.
“Earlier about 350 regular workers have been transferred to the Talegaon factory in Maharashtra while a very few have found jobs elsewhere. Our demand is that we should be absorbed in the new management. We are also trying to approach the Gujarat chief minister to seek his intervention in the matter,” said Soni.
GM announced in July 2015 that it wanted to shut the Halol factory and spend $1 billion in expanding its Talegaon factory in Maharashtra. Last year, it said the Halol factory would function until March 2017.
SAIC HK has proposed to acquire certain assets of GM in Gujarat, Reuters reported on 6 January. The firm has received the Competition Commission of India’s approval for the proposed acquisition, PTI reported on 19 January.
A worker in the assembly unit of the Halol plant said most workers in the factory were in the age group of 32-35 years. The worker said on condition of anonymity that he had not accepted GM’s voluntary separation offer as it was not very lucrative.
Mint has reviewed a copy of the separation scheme, which offers 75 days’ wages for every completed year of service or part thereof, in excess of six months. Alternatively, it gives employees the option of being paid the salary for the remaining months of service left until retirement. An employee opting for the voluntary separation scheme will be eligible for other statutory benefits like gratuity and provident fund, leave encashment and bonus.
“We will consider buying the Halol plant only if it is offered without encumbrance, on a clean slate without any of its existing workers,” an executive of SAIC’s yet-to-be-named India subsidiary said. “We are also exploring the option of setting up a greenfield facility in Gujarat and are in talks with the state government on the same.” This person didn’t want to be named.
A GM India representative confirmed that SAIC wanted the Halol factory without any of the existing workers. The company is trying to work out an amicable solution with SAIC, he said on condition of anonymity.
“The final deal with SAIC is not yet done and we hope to close it a month or so from now. We have been in talks with SAIC since July 2015 and are hopeful of closing the deal before April,” said the GM India official.
The deal size is not known, but GM India had earlier been looking at selling the Halol factory for about Rs1,500 crore, the official said.
An email sent to GM India remained unanswered as of press time.
GM India has made attempts to close the Halol factory in the past, but met with criticism by the Gujarat government, which rejected its proposal last year.
“At present there is no proposal from GM to close down its Halol factory,” said a senior government official in the state’s labour department on condition of anonymity.
Between its two factories in India, GM manufacturers the Chevrolet Beat, Chevrolet Sail, Chevrolet Cruze, Chevrolet Enjoy and Chevrolet Tavera.
“The company is now focusing on the export market and for this it will need to further upscale the Talegaon facility. Currently the company is mainly exporting Beat to Latin American markets like Mexico and Chile. The company is also looking at export markets for their future products like the new facelift of Beat and Essentia,” said a Mumbai-based auto expert.