Tata Motors to takeover Sanand plant; signs MoU with Ford and Gujarat govt

Tata Motors' subsidiary Tata Passenger Electric Mobility Limited (TPEML) on Monday signed a tripartite memorandum of understanding (MoU) with Ford India Private Limited and the Government of Gujarat for takeover of Ford's passenger vehicle manufacturing plant at Sanand.

Signed between Gujarat government's Additional Chief Secretary (ACS) - Industries, Rajiv Kumar Gupta, Tata Passenger Electric Mobility Managing Director, Shailesh Chandra and Ford India Pvt. Ltd.'s Transformation Officer and Country Head, Balasundaram Radhakrishnan.

With this, Ford India's Sanand plant paves way for manufacturing of electric vehicles (EVs) by Tata Motors' subsidiary TPEML.

The chief minister's office (CMO) on Monday stated that the MoU also entails continuation of the state support agreement signed between Gujarat government and Ford India Pvt. Ltd. in 2011, which now includes Tata Passenger Electric Mobility Limited.

As part of the MoU, Tata Motors would take over land, plant building, machinery, and vehicle assembly from Ford India Pvt. Ltd., along with all workers working at the plant. There are currently 3043 direct jobs and 20,000 indirect jobs being provided at the plant in Sanand.

Of the total 460 acres of land, Ford India's vehicle assembly plant is spread across 350 acres while the engine manufacturing plant is across 110 acres. However, Ford India will continue to manufacture engines at the Sanand plant which will be leased to the company by Tata Motors. As a result, water, electricity, effluent treatment plant, and other utilities will be commonly used by the two occupants.

The CMO stated that the whole takeover process was completed within 90 days due to Chief Minister Bhupendra Patel-led Gujarat government's "positive approach".

"The MoU also addresses a major unemployment crisis that could have emerged at the Sanand plant. Otherwise, the closure of the plant would have led to unemployment for around 25,000 workers directly or indirectly. Moreover, ancillary units providing spare parts to the plant would have also faced closure leading to unemployment among their workers," CMO stated.

"The takeover of an overseas company like Ford India by an Indian company like Tata Motors is also in line with PM Narendra Modi's Aatmanirbhar Bharat and Gujarat has taken a step towards the same," it stated.

Tata Motors had earlier approached the state government with a proposal to acquire Ford India's plant at Sanand which recently received a no-objection certificate from the cabinet.

After discontinuing passenger cars, workers at Sanand plant were engaged in manufacturing spare parts for Ford cars, apart from engines.

However, the company had set an internal deadline for the car plant till March 2022 for manufacturing spare parts used for replacement under warranty.

Last year, Ford was in talks with companies like Ola and Mahindra & Mahindra for contract manufacturing or for the sale of both factories, the failure of which led to the closure announcement.