General Motors To Seek Reversal Of Order Prohibiting Plant Closure
Firm states that the decision sends a concerning message to potential future investors.
General Motors plans to appeal against rejection of its plant closure application by the Maharashtra government.
It is well known that General Motors is exiting India and that it signed a term sheet for sale of its Talegaon factory to Great Wall Motors in January of 2020.
With the term sheet for sale set to expire by the middle of this year, the work on completion of sale is pending FDI approval. Meanwhile, the automaker had filed for a closure application on 20th November 2020 and stopped production on 24th December.
However, the Maharashtra government rejected the General Motors plant closure application earlier this week, a decision that the automaker wants reversed.
George Svigos, General Motors Spokesman, stated that the government’s decision is surprising and “diverges sharply from Maharashtra’s business-friendly reputation” since it seeks to prevent the exit of a long-time investor.
He added that this move sends a concerning message to potential future investors who want to bring jobs to the State as the government’s decision potentially requires the company to remain in operation when there is no work to be done.
The issue is that the firm is negotiating with its employees at Talegaon to accept its severance terms, while the General Motors Employee Union is seeking assurance on employment from the plant’s prospective buyer.
Having filed a petition with the Bombay High Court against the plant closure, which contended that the automaker cannot file an application for closure of an already sold site, the union said the firm forced and coerced its employees to opt for Voluntary Retirement Scheme (VRS) which, according to it, was not fair.
What the union wants is for the 1550 employees to have a secure job no matter who buys the factory. But, the transfer of workforce is not part of the sale agreement and the carmaker has requested to union to negotiate a separation package and cease spreading, in its view, misinformation.
Claiming that the firm has a credible track record of labour relations, Svigos stated that General Motors is committed to offering a “more than fair separation package to the workforce”, adding that the offer is well in excess of the legal minimum of 15 days per year of service.
Source – ETAuto.com