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Tata Motors’ subsidiary Tata Passenger Electric Mobility Ltd (TPEML) has agreed to acquire Ford India’s manufacturing plant at Sanand in Gujarat for around 726 crore, the Indian auto giant said in an exchange filing Sunday night.
In this regard, Tata Motors signed a Unit Transfer Agreement (UTA) with Ford India to acquire assets including entire land and buildings, vehicle manufacturing plant along with machinery and equipment.
As part of the agreement signed between the two auto majors, all the eligible employees at the Sanand unit will move to Tata Motors.
Ford will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from TPEML on mutually agreed terms.
TPEML has agreed to offer employment to the eligible Ford India employees working at Powertrain Manufacturing Plant in the event of Ford India’s cessation of such operations. The plant offers 3,043 direct jobs and 20,000 indirect jobs.
Ford India’s vehicle assembly plant at Sanand, Gujarat is spread across 350 acres while the engine-manufacturing plant has 110 acres.
In May this year, Tata Motors has got the permission to take over the former’s passenger car manufacturing plant in Sanand, Gujarat. A proposal to take the deal forward was put forth by the two carmakers which was cleared by the Union Cabinet.
Ford Motor Company announced its decision to leave India late last year owing to a range of factors like wrong-reading of the market/product design/positioning and huge investment in a second plant when the first plant capacity itself was not fully utilised, according to experts.
The company’s passenger vehicle manufacturing plant in Sanand ceased operations by April this year.
With Tata Motors Passenger Vehicle’s manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders, according to experts.
