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Ford announces final severance package to workers of its Chennai plant

Management announces the decision as talks with the union fail

September 05, 2022 08:50 pm | Updated 08:50 pm IST - CHENNAI

Ford on Monday announced final severance package for its employees at the Chennai plant. The offer will be open till September 23. The announcement comes as the management’s negotiations with the union on the settlement have failed.

Ford said it had held 68 meetings with the union, the labour authorities and senior government officials. Unable to find a buyer for its manufacturing plant, the management decided to roll out the final severance settlement offer to employees, which on an average, is equivalent to 130 days of gross wages per completed year of service. This exceeds the statutory stipulation and is higher than the industry benchmark, the company said.

With a cumulative average severance of ₹41 lakh per employee (from a minimum amount of ₹33 lakh and a maximum cap of ₹85 lakh), the final severance settlement offer translates to an average of about 4.6 years/56-month salary for each employee (from a minimum of 43 months to a maximum of 100 months), the company said.

Ford claimed its attempts to negotiate a fair severance package had not yielded results because of the union’s “unreasonable demands” (of an average wage for 215 days per completed year of service).

The company said it strongly encouraged employees to accept and sign up for the offer and the employees who do so before the deadline will be paid wages until September 30.

Post the deadline, the employees will only be paid severance pay of 15 days per completed year of service. The company continues to provide the employees with outplacement support as previously communicated, it added.

In September last year, Ford had decided to wind up its operations in India. Its Gujarat operation had been taken over by Tata Motors.

P. Senthilkumar, general secretary of Chennai Ford Employees’ Union, ssaid the employees had been advised not to take the offer from the company.

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