Tata Motors might be holding early talks with Ford to acquire the Tamil Nadu and Gujarat plants of the American carmaker, according to multiple sources. Ford had announced that month it would cease to manufacture cars in India owing to low sales.
Tata Motors and Ford have associated earlier as well for asset purchases. In March 2008, Tata Motors had bought over the Jaguar Land Rover for $2.3 billion from Ford.
The acquisition of these manufacturing plants would strengthen Tata Motors’ venture into eco-friendly alternatives. This deal comes after Tata Motors was given permission from the National Company Law Tribunal (NCLT) Mumbai bench in March this year to separate its domestic passenger vehicle business, valued at about Rs 9,420 crore, into a standalone entity.
The speculations have been holding a firmer ground on the back of several meetings held between the Tata Group and the Tamil Nadu government. On Wednesday, Tata Sons Chairman N Chandrasekaran held talks with Tamil Nadu Chief Minister MK Stalin and state Industries Minister Thangam Thennarasu. The details of the high-level talks were not disclosed, with this being the second time in a span of two weeks that the Tata Group executives are meeting the CM.
Earlier on September 27, Tata Motors Executive Director Girish Wagh met Stalin. A Tata Motors spokesperson said Chandrasekaran had “a courtesy meeting with the Tamil Nadu chief minister and everything else was speculation.”
The Tamil Nadu government has been constantly trying to provide relief and alternative employment options to the distressed employees of both the Ford plants.
The deal might see the light of the day as Tata Motors, India’s largest vehicle maker, currently has no manufacturing plant in Tamil Nadu. However, the homegrown carmaker does have a plant in Gujarat next to Ford’s manufacturing plant. Moreover, Tamil Nadu desperately wants to find a new owner for Ford’s unit in the state so that it can save jobs, and small and medium enterprises (SMEs) will counter minimal damage due to Ford India’s decision to close its manufacturing plants. The US auto major took the decision after crossing $2 billion worth of losses in the matter of last 10 years in its India units.
S Suresh, president of the Ford Workers Union, said, “We have not received any official communication about the same as yet. No one from the Tata Group has visited the factory either. They have only met with the chief minister and there could be many reasons for that. Earlier, when talks were on, representatives of the companies would visit the Ford plant. We are still awaiting news.”