New Delhi, Aug 8 (.).- Indian conglomerate Tata Group on Monday announced an agreement to acquire a plant of multinational Ford Motors in India, including all its buildings and machinery. The manufacturer is trying to save millions in losses after shutting down production.
The deal signed between the Tata Group and Ford India Pvt Ltd (FIPL) for around $91 million envisages “complete acquisition of land and buildings; transfer of manufacturing plant and machinery and equipment located therein; and transfer of all eligible employees of FIPL”. vehicle manufacturing operations at Sanand Nagar in the western Indian state of Gujarat,” it said in a statement.
The Sanand plant is one of two owned by the American multinational in India, dedicated to manufacturing its world-class compact models, while its headquarters in the southern city of Chennai produces a range that includes the Ford EcoSport and Ford Endeavour.
Ford will continue to operate by “leasing land and buildings” from subsidiary Tata Passenger Electric Mobility, “on mutually agreed terms.”
Tata has also agreed to provide employment to qualified workers at the Ford manufacturing plant “if Ford ceases such operations,” according to a statement released today on Sunday.
The announcement, which is yet to go ahead from Indian officials, “marks an important step in the realignment of Ford’s business in India, which is part of our Ford+ plan for strategic transformation,” said Ford Motor Transformation Director (NYSE: ), Steve Armstrong. , outlined a “best effort to care for victims of rehabilitation.”
“We are confident that both the state-of-the-art manufacturing system and world-class (manufacturing plant) talent will continue to thrive under the new leadership and help Tata Motors (NS:) reach new heights,” Armstrong said.
Ford Motor Company announced in September 2020 the decision to close two of its manufacturing plants in India after suffering operating losses of more than $2 billion over the past 10 years and slumping demand for new vehicles.
Despite several attempts to gain a foothold in the Indian market, Ford became the second US automaker to shut down operations, with General Motors (NYSE: ) shutting down its domestic production in 2017 in the face of mounting losses.
Meanwhile, Tata Motors’ auto business “has generated market-leading growth in recent years and has strong plans to sustain this momentum,” the Indian company said in a statement.
“With our manufacturing capacity nearing completion, this acquisition is timely and beneficial to all stakeholders. It will open a state-of-the-art manufacturing capacity of 300,000 units per annum, which can scale to 420,000 units per annum,” he said.
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