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General Motors issues ultimatum to Talegaon factory workers: Accept separation package or face lawsuit

General Motors India sold the Maharashtra plant to China’s Great Wall Motors (GWM) but tensions between India and China delayed the completion of the deal.

February 23, 2021 / 11:40 AM IST

Issuing an ultimatum to workers protesting at the Talegaon plant, General Motors India has told employees that they have time till February 23 to either accept the voluntary separation package or face a lawsuit.

The General Motors Employees Union (GMEU), which represents the workers, earlier refused to accept a severance package and instead demanded employment at the plant, which was sold to China’s Great Wall Motors (GWM) but tensions between India and China delayed the completion of the deal and is currently awaiting FDI approval from the Centre.

In a letter sent to the union on February 19, the US carmaker said that severance benefits for around 1,578 blue-collar employees would be slashed to a statutory minimum 15 days for every year of service instead of 75 days offered earlier, the Economic Times reported.

Read: India to clear 45 investments from China, likely to include Great Wall, SAIC

GM India is at a crossroads, and a decision must be made by February 23, Asif Khatri, VP of manufacturing, said in the letter.


He further said that workers could "either choose a path of dialogue to reach an amicable settlement and accept the generous package or choose a path of confrontation or litigation".

The workers union is likely to take up the matter with Maharashtra Labour Minister Dilip Walse-Patil.

"We feel the compensation extended by the company can never be anywhere close to the payout of a regular job. the company did post a letter at the company premises and some of the clauses did not go well with the workers," said Sandip Shridhar Bhegada, president of the GMEU, as per the report.

He added that General Motors should ensure job continuity.

In the letter, Khatri alleged that the employees union had used "unachievable fiction around employment continuity to stonewall efforts for a fruitful dialogue relating to plant closure".

He said, "GM India would not like to pursue litigation, except as the last available option."

GM and Great Wall Motors had signed a binding term sheet in January 2020, and were scheduled to complete the transaction in the second half of the year. However, India increased scrutiny of investments from companies based in neighbouring countries, after military tensions escalated along the Line of Actual Control (LAC).

As per a Reuters report, India is set to clear 45 investment proposals from China, which are likely to include those from Great Wall Motor and SAIC Motor Corp.
Moneycontrol News
first published: Feb 23, 2021 11:40 am

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