Chennai: Ford India Private Ltd and the Chennai Ford Employees Union (CFEU) on Friday inked the Settlement Agreement or the deal for severance package, said the company.
The company has also announced a `sign-off’ bonus of one month salary in addition to the lump sum severance package.
US automobile major Ford Motor Company last year decided to shut down its two plants -one near here and the other in Gujarat.
The plant near here has 2,592 permanent employees.
According to Balasundaram Radhakrishnan, Transformation Office, Ford India, the final settlement package (an average equivalent of 140 days of gross wages per completed year of service and additional Rs 1.5 lakh lumpsum per employee) signed on Friday translates to an average of about 5.2 years/62-month of salary for each employee (from a minimum of 4.1 years i.e., 49 months to a maximum of 9 years i.e., 108 months).
The cumulative severance for each employee will range from a minimum amount of Rs 34.5 lakh and a maximum cap of Rs 86.5 lakh, the company had said earlier.
The last date of employment for all employees will be September 30 and Ford India is notifying employees of the next steps and looks forward to completing the exit formalities.
With Diwali to be celebrated next month, Ford India, as a goodwill measure, has also decided to pay an additional amount equivalent to one month of gross wages as a sign-on or sign-off benefit for employees who complete the exit process by October 14.
In September 2021, Ford India announced its decision to wind down vehicle assembly in Gujarat’s Sanand by the fourth quarter of 2021, and vehicle and engine manufacturing in Chennai by the second quarter of 2022.
Ford India had set up four plants in the country — vehicle and engine plants in Chennai and Sanand.
The company sold its Gujarat facility for Rs 725.70 crore to Tata Passenger Electric Mobility Ltd.
The plant in Sanand includes the entire land and buildings, the vehicle manufacturing plant, along with its machinery and equipment, and transfer of all eligible employees of Ford India’s vehicle manufacturing operations.
Ford India will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from Tata Passenger Electric.
Tata Passenger Electric has agreed to offer employment to the eligible employees of Ford India’s powertrain unit when the latter stops such operations.