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Ford India finalizes severance pay with Chennai factory workers

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Ford India Private Ltd, which is closing its factory nearby, has reached a final settlement with the union, the company said on Wednesday.



Under the agreed settlement, Ford India will revise the final severance package to an average equivalent of 140 days of gross pay per year of service completed over the current offer of 130 days.

An additional one-time lump sum of Rs 1.5 lakh will also be included in the final bill.

The cumulative severance pay for each employee ranges from a minimum amount of Rs 34.5 lakh and a maximum of Rs 86.5 lakh.

“The revised settlement will translate into an average of approximately 5.1 years/62 months salary for each employee (from a minimum of 3.9 years, i.e. 47 months to a maximum of 8.7 years, i.e. 105 months),” said Ford India.

The intention is that the formal settlement agreement will be executed before the end of September.

The company will notify employees of the next steps and looks forward to completing the exit formalities by September 30, and will continue to pay wages to all employees to support the exit formalities until the date.

In September 2021, Ford India announced its decision to end vehicle assembly at Sanand in Gujarat by the fourth quarter of 2021, and to discontinue vehicle and engine production in Gujarat. Chennai by the second quarter of 2022.

Ford India had set up four factories in the country — car and motorcycle factories in Chennai and Sanand.

The company sold its Gujarat facility for Rs 725.70 crore to Tata Passenger Electric Mobility Ltd.

The Sanand plant includes the entire site and buildings, the auto plant, machinery and equipment, and the transfer of all eligible employees of Ford India’s auto manufacturing operations.

Ford India will continue to operate its powertrain manufacturing facility by leasing back powertrain plant land and buildings from Tata Passenger Electric.

Tata Passenger Electric has agreed to provide employment to the eligible Ford India powertrain employees when it ceases such activities.

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