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Tata Motors EV arm acquires Ford India’s manufacturing plant in Gujarat

Highlights

  • The two parties, along with the Gujarat Government, have already filed an MoU in May
  • Ford India will lease some of the space from Tata Motors for its powertrain production unit
  • The Sanand unit is situated close to Tata Motors’ existing manufacturing plant

In a move that could significantly bolster Tata Motors‘ electric vehicle (EV) manufacturing capabilities, the automaker’s electric subsidiary Tata Passenger Electric Mobility Limited (TPEML) has acquired Ford India’s production unit in Gujarat’s Sanand for ₹725.7 crores. TPEML and Ford India have already signed a Unit Transfer Agreement for the purpose, the manufacturer said.

This agreement between the two companies will see all eligible employees of Ford India move over to Tata. Additionally, all current equipment and machinery, plus the land and other properties in the plant will go to Tata Motors. However, Ford India will run its powertrain production unit in the Sanand plant by leasing back some of the property from TPEML, as per the agreement. Tata Motors’ announcement came as part of a late Sunday intimation to the stock exchange.

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The Indian auto giant has also made provisions to allow some of the employees of Ford India’s powertrain production unit to join Tata Motors if Ford decides to further cut down its operations. While the move has been formally announced, it’s yet to receive regulatory approvals from the government. Towards this effort, TPEML, Ford India, and the Government of Gujarat have already filed an MoU in late May.

Interestingly, the newly acquired Sanand plant also happens to be in the same vicinity as Tata Motors’ existing production unit. This, in the company’s words, would facilitate a seamless transition for the new TPEML unit.

“The agreement with FIPL (Ford India Private Limited) signed today is beneficial to all stakeholders and reflects Tata Motors strong aspiration to further strengthen its market position in the passenger vehicles segment and to continue to build on its leadership position in the electric vehicle segment,” MD of Tata Motors’ Passenger Vehicles division, Shailesh Chandra said in an official statement.

Tata Motors’ production gets a significant boost with the new unit

This newly acquired plant would enable the company to produce up to 3,00,000 units per year, which can be upped to 4,20,000 if necessary, the company further said. Ford Motor Company’s Transformation Officer, Steve Armstrong welcomed the development, saying this is a crucial move in the American automaker’s restructuring operations in India. This decision was kicked off by Ford in September 2021, while publicly announcing the closure of its two production units in India.

“With the transfer of employment for eligible vehicle manufacturing employees included in the agreement, this milestone also highlights our best effort in caring for those impacted by the restructuring,” Armstrong said.

Via: LiveMint

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