General Motors hasn’t got clearance from the Gujarat government to sell its factory as the company hasn’t given a settlement plan for the 1100 odd employees working there.
General Motors has been struggling in India for about two decades sighting poor marketing strategies and not so drool worthy cars. The sales have dipped down year on year basis which has eventually forced the American carmaker on shutting down their operations at Halol, Gujarat as their accumulated loss has piled upto Rs. 4000 crores. With production coming to an end in coming months, the plant would become a dead weight to the heavily loss ridden company.
Before axing the plant from its books, General Motors has been asked by the State government to submit a settlement plan for the employees working at the location which is accounted approximately to 1100. Thus GM has to submit a fresh proposal to the Gujarat government while the American automaker is still examining options.
The plant was planned to be sold to SAIC Motor Corporation of China which is one of GM India’s stake holders with 9% shares; however SAIC postponed the same as the management didn’t want to get their hands dirty. SAIC asked for a clean chit before taking over the Halol plant which includes tax settlement and also assurance from the State government on passing on the same incentives to SAIC which was provided to General Motors India. Officials from SAIC also said they would not take any liabilities including the existing employees; which means SAIC wants to start from scratch.
SAIC officials are in talks with both General Motors and government of Gujarat for sorting out the issues before commencing operations. With an annual capacity of about 1.1 lakh units, SAIC would certainly get a lot of advantage with an already existing setup, perhaps it is also said that SAIC (though being a share holder) is looking into other options as it is being approached by other state governments like Andhra Pradesh, Rajasthan, Karnataka, West Bengal, Maharashtra and Punjab.
Post shutting down the Halol plant, General Motors India would be manufacturing their entire portfolio in the Talegaon factory in Maharashtra. The company has already shifted few personnels to the latter plant but the major settlement with the rest of the employees is to be finalised. General Motors is mulling up plans to close down this issue at the earliest and focus on the Talegaon facility.