The Covid-19 pandemic is still creating major headaches for auto manufacturers. In a drastic effort to restructure and reduce costs, Ford announced plans to drastically shift its operations in India.
On Friday, Ford released a press statement in which they described the future of their presence in India. According to the statement, Ford India will begin winding down vehicle assembly in the city of Sanand by the fourth quarter of 2021, with vehicle and engine manufacturing halting in Chennai during the second quarter of 2022. Customers in India will still be able to receive parts, service, and warranty support.
The move comes in the wake of how unprofitable Indian production has been for Ford. The company stated that it incurred operating losses of over $2 billion in the past 10 years, along with a $0.8 billion non-operating write-down of assets in 2019. By changing their approach, Ford anticipates they will “create a sustainably profitable business in India.”
Ford’s new plan is to focus on growing their Ford Business Solutions team to provide support for Ford at a global level. Already the company’s Business Solutions team has over 11,000 team members in India alone. Additionally, more than 500 employees at the Sanand Engine plant, which produces engines for export for the best-selling Ranger pickup truck, will remain with the company, along with about 100 employees supporting parts distribution and customer service.
About 4,000 employees are expected to be impacted by the restructuring plan. Ford stated that they would “work closely with employees, unions, dealers, and suppliers to care for those directly impacted” by the changes. “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,” said Steven Armstrong, transformation officer for South America and India. “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.”