Ford India on Thursday said it has arrived at a settlement with the employees union on the severance package after the company’s decision to shut its Tamil Nadu plant as part of a restructuring exercise. Ford will revise the final severance settlement to an average equivalent of 140 days of gross wages per completed year of service from the ongoing offer of 130 days.
The deal, which has arrived after more than a year and over 68 meetings, has put an end to the uncertainties over employee settlement at the Ford India factory at Maraimalai Nagar near Chennai.
“An additional one-time lump sum of Rs 1.50 lakh will also be included in the final settlement… A cumulative severance package for each employee would range from Rs 34.50 lakh up to Rs 86.50 lakh and the revised settlement would translate to an average of about 5.1 years or 62 months salary for each employee,” Ford India, the Indian subsidiary of the US-based automaker Ford, said in a statement.
It also said Ford has continuously made efforts to negotiate a fair and reasonable severance package and is happy to arrive at a settlement with the union.
The company added that it will continue paying wages to employees until September 30 to support the exit formalities and remains grateful to the union, the Tamil Nadu government and labour officials for their support.
“Ford India said the formal settlement agreement has been planned to be executed before the end of this month and employees would be notified on the next steps towards completing the exit formalities,” the company, which closed down its operations in India September 2021, said in the statement.
The company shut its operations in India and decided to sell only imported vehicles. The company has already stopped producing vehicles like EcoSport, Figo and Aspire. Its last production car was rolled out from the assembly lines at the Maraimalai Nagar facility about 45 kms from here in July.
(With Inputs From PTI)
Read all the Latest Business News and Breaking News here