Gujarat's First Automotive Factory Set To Shut Down After 21 Years!

GM is set to shut down their manufacturing plant located in Gujarat after 21 years.

By Promeet

Updated: Monday, March 6, 2017, 15:40 [IST]

Gujarat's first car manufacturing plant which was set up by General Motors (GM) India, is set to shut down after 21 years of existence in the coming month (April 2017). The plant is located near Halol near Vadodara.

Gujarat's First Automotive Factory Is Set To Shut Down After 21 Years!

General Motors India had announced back in June 2015 that they will be closing the facility by mid-2016. Later, the company decided to continue production till March 2017. The shutting was delayed due to an orderly transition for employees, suppliers and other stakeholders.

The top officials from the company recently held a meeting with senior government officials. This was to discuss the exit modality after the bulk of 650 plus workers at the plant not accepting Voluntary Separation Scheme (VSS).

A worker at the Halol plant commented saying, "A month ago, we were offered voluntary separation scheme, which we (the workers) have opposed. As against Rs 35-40 lakh offered to supervisors, the workers have been promised just Rs 8-10 lakh".

JN Singh, chief secretary, Gujarat government commented on this aspect saying, "GM has decided to close their plant as per their business decision. The state government has allowed the company to wind up its operation on the assurance that they would resolve all issues related to workers,"

GM, however, continues its negotiations to sell certain assets of the facility to Chinese automaker - SAIC Motor Corp. When it was contacted, the company stated that the discussions with SAIC on the sale of Halol are progressing well.

SAIC wants the assets to be burden free with no-objection certificates from state authorities before it goes ahead with the purchase. On the other hand, it also said that they will talk with the state governments of Maharashtra, Andhra Pradesh and Gujarat for a greenfield car plant.

So as the plant in Gujarat will shut down, it will open doors for auto giants like Tata Motors, Ford India to set up manufacturing plants there. Meanwhile, Honda Motorcycle & Scooter India (HMSI) has already invested in their manufacturing plants in Gujarat.