This Article is From Sep 23, 2021

Losses Worth Crores: Vendors Meet Tamil Nadu Minister Over Ford Exit

The vendors said the Ford's exit will translate to huge losses in terms of raw materials that have piled up, imported and locally made parts and exclusive machinery.

The vendors raised concerns of job losses and also suggested measures to avert adverse effects


At least 75 vendors from across Tamil Nadu, supplying components to auto major Ford, met state Rural Industries Minister TM Anbarasan in Chennai after the car-maker announced its India exit. Claiming that business with Ford made up 20-40% of their business, the vendors elaborated how the plant's closure - just outside Chennai - will impact their businesses. Ford had cited a drastic fall in market share while announcing its exit from the Indian market.

SFC Solutions, which made fuel and brake systems for the auto giant, is worried about its 300 workers as 80% of the components the company manufactured have been for Ford. The representative of the company told authorities, "At least 200 of the 300 jobs will be lost. We also have imported parts worth Rs 25 crore."

"We don't want to send any worker from my company. But if something doesn't work out, we will have to," said S Nargunam, Adviser to industry body TIEMA.

The vendors said the carmaker's exit will translate to huge losses in terms of raw materials that have piled up, imported, and locally made parts, and exclusive machinery.

While some raised concerns over job and financial losses, some offered suggestions to avert an adverse impact.

Ellar - another company that makes auto components - has gradually reduced its dependence on Ford from 50% to 10%. Ford has already compensated him, Ellar's CEO Pandiyan Mayilvaganam told NDTV.

"Ford still manufactures its Eco Sport overseas. Why can they not continue to buy our parts wherever they make the cars? We can export to them," he said.

The Ford plant employs 4,300 workers, including 1,400 on contract, who fear losing their livelihood. However, in assurance to the workers, Minister TM Anbarasan, however, said, "We will not abandon them. Our government will not let it go, particularly our chief minister."

Ford, sources said, is working on a series of compensation packages. Tamil Nadu is in talks with other carmakers who could take over the Chennai plant. With Chennai being called the Detroit of India, it's a major challenge for the DMK government to ensure Ford's sudden braking doesn't dent Brand Chennai.

On Tuesday, hundreds of workers at the Ford factory in Gujarat protested outside the automaker's plant, demanding that the factory's closure plan be scrapped or workers be provided other jobs, reported news agency Reuters. The blue-uniformed workers gathered outside what is Ford's car manufacturing and engine-making facility in the state's Sanand city and said the plant's closure planned for the year-end would lead to the loss of their livelihoods.

Earlier this month, Ford India shocked the country's auto industry and announced its decision to cease local vehicle manufacturing. The company will continue to make vehicles for the export market at its Sanand plant until the end of 2021. The Chennai plant will continue to make engines and vehicles for the export market till the second quarter of 2022.