A man has a gasoline nozzle at a gas station in Kolkata, India, on July 3, 2021.
Indranil Aditya | NurPhoto | Getty Images
DETROIT – Ford Motor ends production in India, stops its two large plants there and terminates thousands of employees while CEO Jim Farley restructures the car’s operations as part of an investment plan.
The company said Thursday that the shares will cost about $ 2 billion, including pre-tax special charges of about $ 600 million in 2021 and $ 1.2 billion in 2022. About $ 300 million of the $ 2 billion will be non-spending. in cash, including amortization and accelerated amortization, according to the company.
Ford has two vehicle and engine plants – Chennai and Sanand – in the country that employ thousands of people. Ford said Sanand’s vehicle set will end production by the end of the year, followed by Chennai in the second quarter of 2022.
According to the company, about 4,000 people will lose their jobs due to the plans.
Ford Motor Co. CEO Jim Farley is speaking at a press conference at the Rouge Complex in Dearborn, Michigan on September 17, 2020.
Rebecca Cook | Reuters
The automaker said the decision to close the plants was made after more than $ 2 billion in operating losses in India over the past decade. It comes when Farley, who became CEO on Oct. 1, is implementing his Ford + investment plan to be more profitable and better position the automaker of electric and expensive vehicles.
“As part of our Ford + plan, we are taking difficult but necessary actions to deliver a sustainable system
a profitable long-term business and allocating our capital to grow and create value in the right areas, ”Farley said in a statement.
India will continue to be Ford’s second largest wage labor force worldwide. The company said it plans to expand a “business solutions” team of 11,000 employees in India focused on engineering, technology and business operations.
Ford will continue to sell imported vehicles to India and maintain other operations after the restructuring, which the company hopes will “create a profitable business” in the country.
Under Farley’s Ford + investment plan, the company aims to achieve an adjusted profit margin of 8% before interest and taxes in 2023. It also significantly increases its spending on electric and autonomous vehicles.
Ford’s decision to end vehicle production in India comes four years after its rival, General Motors, left the market, dominated by Asian carmakers.
Ford left a joint venture earlier this year with Mahindra and Mahindra in India.