Ford operations in India to undergo 'restructuring'

Ford operations in India to undergo 'restructuring'

Ford Motors has announced its plans to restructure its operations in India. This decision follows after the American automotive brand reportedly lost an accumulated operational cost of US$2 billion over the past 10 years and a US$0.8 billion non-operating write-down of assets in 2019.

As a result, Ford will stop vehicle manufacturing in India — winding down vehicle assembly in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022.

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“As part of our Ford+ plan, we are taking difficult but necessary actions to deliver a sustainably profitable business longer-term and allocate our capital to grow and create value in the right areas. Despite investing significantly in India, Ford has accumulated more than US$2 billion of operating losses over the past 10 years and demand for new vehicles has been much weaker than forecast,” said Ford Motor Company President and CEO Jim Farley.

“I want to be clear that Ford will continue taking care of our valued customers in India, working closely with Ford India’s dealers, all of whom have supported the company for a long time. India remains strategically important for us and, thanks to our growing Ford Business Solutions team, will continue to be a large and important employee base for Ford globally,” Farley added.

Approximately 4,000 employees are expected to be affected by the restructuring, said Ford. The automaker will work closely with employees, unions, suppliers, dealers, government, and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to mitigate the effects of the decision.

“Ford has a long and proud history in India. We are committed to taking care of our customers and working closely with employees, unions, dealers, and suppliers to care for those affected by the restructuring. Despite these efforts, we have not been able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing,” commented Ford India President and Managing Director Anurag Mehrotra.

Despite Ford’s exit from India, the automotive brand says that they will still continue to provide customers in India with ongoing parts, service, and warranty support.

Its Indian workforce who have manned the brand’s manufacturing plants for the past decade might be replaced with software developers, data scientists, R&D engineers, and finance and accounting professionals, in support of the Ford+ plan to transform and modernize Ford globally.

“We are grateful to our dedicated team in India who have undertaken many actions in recent years in an attempt to position the company for profitability and growth. Our ability to refocus our presence in India is a result of their building our expertise in low-cost engineering, global engine manufacturing quality, and business services,” commented Ford Transformation Officer for South America and India Steven Armstrong.

Photos from Ford

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