General Motors India is struggling to make any major profits since its inception and the recent decision of shutting down its loss making Halol plant has evoked an unrest kind situation among the workers.
General Motors India is likely to face a legal challenge from its workers over its plan on shutting down its manufacturing plant in Halol in Gujarat state.
The US car maker General Motors has set up its first Indian manufacturing facility in Halol when it established its base in the country way back in 1996.
Covering 172 acres, the Halol plant has an installed capacity to manufacture 110,000 cars per annum. The plant has a workforce of 1,200 employees, of which 900 staffs are working permanent pay-scale while 300 workers are employed on contractual basis.
The sudden announcement of GM India over shutting down the plant has created unrest among the workers in Halol plant.
General Motors Chief Executive Officer Mary Barra has communicated the plans of shutting down the plant to Halol facility workers through a video conference on Wednesday while she was also making an announcement over $ 1 billion new investment in India to strengthen its manufacturing activities at Talegaon facility in Maharashtra.
Barra had announced the company’s investment plans for India yesterday after meeting with Indian Prime Minister Narendra Modi earlier in the day to discuss over GM’s new investments in the country.
Commenting on the management decision, Halol plant workers union leader Nihil Mehta said the CEO had informed the workers that the plant operation will be shifted to Maharastra in June next year due to its poor performance.
The CEO has also informed that the workers should work without any allowances and prove their worth within one year before shifting to Maharashtra, he said.
Now the union is exploring possibility legal actions for the welfare of workers, Mehta, who is also general secretary of Gujarat Kamdar Mandal, said.
GM shifting its operations to Maharastra is also seen as a major jolt to Guajarat, the home state of Prime Miniser Narendra Modi, who has been promoting ‘Made in India’ campaign across the world.
According to sources in GM India, the company’s Indian officials could not satisfy their global corporate headquarters as it’s market share in the Indian auto industry remains in the range of 2-3 percent despite its presence here for around two decades.
The US car giant’s vehicle sales in June 2015 in India declined to 1,545 units from 1,616 units it sold in the same month a year ago. GM India’s cumulative sales for April-June 2015 has taken hit as it tumbled to 4,698 units from 6,500 units a year ago.
Further the Halol plant has a history of witnessing labour unrest with multiple strikes in the period between 2011 and 2014 and the management is not satisfied with the performance of Halol plant.
A majority of 1,200 workers in Halol plant are native of Gujarat and the workers may find it ‘practically impossible’ to shift their entire family for the sake of job at Talegaon plant in Maharashtra.