Ford India, the subsidiary of US-based automaker Ford, said Thursday it had reached an agreement with workers’ union over the severance package after the company decided to close its Tamil Nadu plant as part of a restructuring.
Accordingly, the company would revise the final severance payment to an average equivalent of 140 gross pay days per completed year of service from the current 130-day offer.
“An additional one-time lump sum of Rs 1.50 lakh will also be included in the final settlement,” Ford India said in a statement.
A cumulative severance package for each employee would range from Rs 34.50 lakh to Rs 86.50 lakh and the revised severance package would result in an average of about 5.1 years or 62 months’ salary for each employee, the company said.
According to Ford India, the formal settlement agreement is expected to be finalized before the end of this month and employees would be briefed on next steps to complete exit formalities.
“The company will continue to pay wages to employees through September 30 to support exit formalities and remains grateful to the union, the Tamil Nadu government and labor officials for their support,” the statement said.
Ford India announced the cessation of its operations in the country in September 2021, saying it will only sell imported vehicles. The company has already stopped producing vehicles like the EcoSport, Figo and Aspire.
The company’s last production car rolled off the assembly lines at the Maraimalai Nagar plant, some 45 km from here, in July.
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