Tata Motors to acquire Ford’s Sanand plant
Tata Motors on Monday announced the signing of a tripartite agreement with Ford and the Gujarat government to acquire the US auto major’s vehicle manufacturing plant in Sanand.
A Memorandum of Understanding (MoU) was signed between Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors and Ford India Private Limited (FIPL) with the Government of Gujarat for the possible acquisition of FIPL’s Sanand facility including the land. , buildings, vehicle manufacturing plants, machinery and equipment, Tata Motors said in a regulatory filing.
The MoU signed on Monday also includes transfer of all eligible employees of FIPL Sanand’s vehicle manufacturing operations, subject to signing of definitive agreements and obtaining relevant approvals.
Shailesh Chandra, MD, Tata Motors Passenger Vehicles Limited and TPEML, said, “Tata Motors has a strong presence for over a decade with its manufacturing facility at Sanand in Gujarat. This MoU will further enhance our commitment to the state to generate more employment and Creates business opportunities.” Told.
He added that the increasing customer preference for passenger and electric vehicles made by Tata Motors has led to manifold growth for the company over the years.
“This will support the expansion of potential transaction capacity, thus seizing the opportunity for future growth and further strengthening our position in the passenger and electric vehicles space,” Chandra said.
The MoU will be followed by the signing of definitive transaction agreements between TPEML and FIPL in the next few weeks, the auto major said. TPEML plans to invest in new machinery and equipment, which is required to get the unit commissioned and ready for production of its vehicles.
With the proposed investment, it will set up an installed capacity of 3 lakh units per year, which can be increased to over 4 lakh units.
“We anticipate that it will take a few months. This MoU for possible acquisition of this unit is a win-win for all stakeholders and helps Tata Motors accelerate the growth of its PV/EV manufacturing capacity. Adjacent to the existing manufacturing is the Tata Motors Passenger Vehicles Limited facility in Sanand, which should help in a smooth transition,” said the Mumbai-based auto major.
Commenting on the development, Gujarat Additional Chief Secretary Rajiv Kumar Gupta said that the MoU aims to catalyze a win-win for all stakeholders and ensure a smooth transition.
“This effort strengthens Gujarat’s image as a progressive, investment-friendly state and resolves to further strengthen the state as a major automotive hub in the country,” he said.
Gupta said this will boost the confidence of the international investment community, strengthen Gujarat’s position as the top investment destination in the country and further strengthen the Atmanirbhar vision.
In September last year, after nearly three decades of struggle to make a mark in India, Ford Motor Company had announced that it would stop production of vehicles at two of its plants in the country – Sanand and Chennai – and replace locally produced vehicles. Will stop selling all products. Vehicle. It had decided to sell only imported vehicles as part of the restructuring exercise, which affected around 4,000 employees.
The company, however, said it would continue to manufacture engines from its Sanand plant, which would be exported to its global operations.
In a separate statement, the state government said the proposed acquisition by TPEML of the Sanand plant has resolved the issue of potential job losses.
After Ford India’s announcement of closing its vehicle manufacturing plant in Sanand in September last year, “about 3,000 direct workers and 20,000 indirect workers were on the verge of losing their jobs”, it added.
In addition, the closure of the plant also threatened the employment of many others who were working for ancillary units providing parts to Ford. Ford India started its plant in the Sanand Industrial Area in 2011 after signing the State Support Agreement (SSA) with the Gujarat government.
The vehicle assembly plant is spread over 350 acres, the engine manufacturing plant is spread over 110 acres, the government release said.
Since Ford India has decided to continue its engine production at the Sanand plant, Tata Motors will lease that land to Ford.
In addition, the two companies have agreed to share common facilities such as water, electricity and wastewater treatment plants, the release said, adding that the Gujarat government will provide necessary clearances for a smooth transition.
Earlier this month, the US auto major also shelved plans to manufacture electric vehicles in India for export despite the government’s nod for production-linked incentives.