GM close to exiting India, Talegaon workers accept separation offer

General Motors India ended the labour standoff after the Bombay High Court dismissed two petitions by the employees' union

US auto major General Motors (GM) is close to exiting its Indian operations, as the majority of employees at its Talegaon unit near Pune have now accepted the severance package. 

After nearly 40 months of standoff between workers and GM India, local authorities and the Maharashtra government intervened to facilitate a smooth transition. The controversy-ridden plant is now slated for closure, with Hyundai poised to take over the operations soon. Hyundai Motor India Ltd said on March 13 last year that it has signed a term sheet with General Motors India (GMI) for the potential acquisition of the Talegaon plant.

In January, the Bombay High Court dismissed two writ petitions filed by the General Motors Employees Union, clearing the path for General Motors India to shut down its manufacturing facility in Talegaon. The High Court upheld the decision of the Industrial Tribunal allowing GMI to close the plant after noting accumulated losses of Rs 9,656.87 crore as of 2021-22.

Justice Milind Jadhav dismissed two writ petitions by General Motors Employees Union challenging the Industrial Court’s orders in a judgment dated January 9, 2024.

The closure process was initiated in February thereafter, and the company had also re-opened the voluntary separation scheme (VSS) for the workers which included 110 days of wages for each completed year of service. 

Labour hurdle

Around 880 workers had declined the VSS when it was offered earlier. According to sources, nearly all of them have now accepted the VSS, with a few expected to accept it in the coming days. Only a small number who are currently out of town have yet to take the VSS. 

A General Motors India spokesperson told Business Standard that following the court’s decision in favour of the factory closure, the company “reiterated its unwavering commitment to the welfare of its employees”. The spokesperson added, “As a demonstration of this commitment, GM has extended the remainder of the original separation package as part of the settlement. We are pleased to announce the amicable resolution of all outstanding labour matters. We thank our employees for their contributions over the years and wish them success in their future endeavours. 

Finding exit route

GM India had decided to shut down the Halol plant in Gujarat in 2017 due to accumulated losses of Rs 8,500 crore, and it was using the Talegaon plant near Pune to export vehicles from India. The Halol plant was sold off to China’s SAIC Motor Corp. The company eventually made efforts to sell the plant to China’s Great Wall Motors. But things did not move ahead. GM India filed an application with the Maharashtra government on November 20, 2020 seeking to shut down its Talegaon unit which was making the Beat hatchback car for export markets. The Maharashtra government referred the matter to the Industrial Tribunal in March, 2021.

GM offered a VSS for the Talegaon plant workers in June 2021. Around 484 workers availed the benefits under the scheme and took the separation benefit of Rs 25 -35 lakh each. On July 12, 2021 the company terminated the services of the remaining workmen under Clause 31.08 of the Certified Standing Order (CSO) that permitted the company to terminate the services of such workmen if they were laid off for more than 45 days. 

Legal hurdles

There were several rounds of litigation between the employee union and the company before the Industrial Court, the Bombay High Court, the Apex Court, as well as the state government challenging matters like closure of the plant, layoffs, service conditions, acquisition deals etc. The Industrial Tribunal eventually passed an award on June 30, 2023, allowing the closure of the Talegaon plant with effect from April 30, 2021. The employee union challenged the tribunal’s June 30, 2023 order allowing closure as well as the order dated April 28, 2023.

Hyundai Motor India will invest Rs 6,000 crore at the Talegaon facility. Talegaon facility now has a capacity of about 130,000 units per annum. 


Talegaon tales

2006: GM India starts building the Talegaon plant

2008: Production at site begins 

Dec 2017: GM stops selling cars in India, but Talegaon plant continues making Beat cars for export

Jan 2020: GM and China’s Great Wall Motors sign agreement for plant’s acquisition

Dec 2020: Talegaon plant closes

Jun 2022: Talks fall through

Mar 2023: GM and HMIL sign term-sheet for plant’s acquisition

Aug 2023: HMIL signs asset purchase agreement with GM

Jan 2024: Bombay HC dismisses GM Employee Union petition challenging closure of Talegaon plant