New Delhi

General Motors India will shut down its car manufacturing plant at Halol in central Gujarat by the second half of 2016. The plant has 1,27,000 units per annum capacity as per General Motors India website.

General Motors president Dan Ammann made this announcement.

The company today also announced that it will invest a $ 1 billion investment in India to revive its business with 10 new models in 5 years, but all this investment will be made at its Talegaon plant, near Pune.

GM India started its Indian journey in 1996 from Halol plant in Gujarat. Its flagship brand, Chevrolet, was introduced in India in 2003.

Headquartered at Gurgaon, GM India presently makes the Chevrolet Spark, Chevrolet Beat, Chevrolet Sail, Chevrolet Sail Hatchback, Chevrolet Cruze, Chevrolet Enjoy, Chevrolet Tavera, Chevrolet Captiva for the Indian market.

The company operates two manufacturing facilities in India including the Halol Manufacturing Plant in the state of Gujarat, with a manufacturing capacity of 1,27,000 units per annum (Cruze, Enjoy, Tavera, Captiva CBU) and the Talegaon Manufacturing Plant in the state of Maharashtra 1,65,000 units per annum (Spark, Beat, SAIL, SAIL Hatchback). It also operates the Flexi Powertrain Plant at Talegaon under a capacity of 160,000 engines per annum.

General Motors Technical Centre is Located in Bangalore, it houses the Design Studio and the Engineering centre. It is actively involved in Design, Analysis and Development of vehicles and Powertrains both globally and for the Indian market.

GM India plans to launch the Trailblazer SUV by October this year and the Spin MPV by early 2017. The third new vehicle will be the new Beat hatchback and notchback. Also, the Talegaon plant’s capacity is to be increased from 130,000 units per annum to 220,000 units by 2025 to help position it as a global export hub for the company.

Facts check:

Halol facility:

-The Halol facility is spread over an area of 172 acres with an annual manufacturing capacity of 1,10,000 units/year. However, according to worker sources, the company had significantly reduced manufacturing at Halol facility. Operations here will be stopped from the second half of 2016. This plant employs 1,100 workers.

-Termed as the mother plant of the company, which started GM’s India operations in 1996, the Halol unit had faced severe labour issues in the past with repeated strikes during 2010 to 2014.

According to Nihil Mehta, union leader at GM’s Halol plant and general secretary of Gujarat Kamdar Mandal:

-Workers at Halol will be paid only their basic wages, void of allowances. This is basically asking them to leave. If someone decides to stay back till June 2016, he or she would either be eased off with a month’s pay or transferred to the company’s Talegaon plant near Pune.

– On Wednesday, the management of the company led by Mary Barra, Chief Executive Officer, GM, held a video conference with the workers at Halol, informing them about company’s decision to close the unit from June 2016 onwards.

– During the video conference, the chief executive told the workers that ‘the plant did not have good performance’. Therefore, (it is) being shifted to Pune. Workers have been a year’s time to prove their worth by working without any additional allowances and perks.We explore our legal options to challenge this decision.

-According to Jacoby, the company was working hard to find an alternative solution to Halol. According to the company, Halol’s 1,100 employees will have the option of applying for roles at the Talegaon plant. Temporary workers say contracts of nearly 250 of them have not been renewed this year.

Letter to employees

-In a notice addressing the workers and signed by the Plant Manager, S K Garg, the company mentioned that running two manufacturing sites was not in accordance with the company’s new business strategy. “The company is considering several options for the future of Halol plant… These options include selling of the plant and other alternate arrangements. The decision will affect the Halol plant workers. Many workers will be transferred to GM’s other plant and some will be given offer to join again. But many others will have to be laid off after closure of work post June 2016,” the letter read.

-As mentioned in the letter to employees, GM has offered compensation to employees much more than the minimum legal provisions like one-month salary for every year in service, basic monthly salary beginning from August 2015 till the operations are closed. “This is subject to peaceful and seamless operations during the year,” the company’s letter said.

Labour issues

– There are about 1,200 workers presently employed at Halol plant, of which about 900 are permanent workers and 300 contractual.

– Company’s Halol plant has remained mired in controversies due to worker unrest. In October 2010, there was a four-day strike by workers for higher wages. Again in March 2011, the Gujarat Kamdar Mandal with support from Indian National Trade Union (INTUC) called for an indefinite strike of 900 workers raising health hazard issues. The strike lasted for about six weeks. Later, in 2014, contractual workers resorted to strike for wage and other related issues.

– DeshGujarat