News: General Motors India inches towards closure: Issues VSS to employees

Employee Relations

General Motors India inches towards closure: Issues VSS to employees

After announcing the closure of Indian operations last month, General Motors moves closer towards winding down.
General Motors India inches towards closure: Issues VSS to employees

After announcing the closure of Indian operations last month, General Motors moves closer towards winding down.

General Motors has given its employees less than a month to avail of a voluntary separation scheme (VSS), as it inches closer to the closure of operations in India, says a news report. Last month, the company had announced, rather suddenly, that it would stop its Indian operations. Employees are said to have received emails about VSS the very next day, and the deadline for availing the same is 15th June 2017.

At the time of the announcement, GM India President and MD, Kaher Kazem had said that nearly 400 employees working in sales and after sales would be let go. As per the report, GM is offering compensation of “45 days salary for every year of completed year of service or part thereof in excess of six months” in normal cases. For those employees nearing retirement, the offer is “monthly salary multiplied by the remaining months of service till the normal age of retirement”. The minimum compensation payable eligible shall be three months salary, it added.

The report states that sources believe around 250 people in marketing, sales, finance, and administration could formally exit as early as September. This is in contrast to an announcement by Kazem, who had said that half of the 400 employees were “expected to move on by the end of 2017.” A GM India spokesperson has been quoted in the report, “GM understands this is a difficult decision that impacts a number of our hard-working and professional employees, and we are providing counseling, financial advice, and outplacement support, as well as a separation package in excess of the statutory requirements.” The report also adds that employees who are a part of the sales department have been issued letters of continuation of service until further notice. 

GM was forced to issue an updated VRS scheme last month at the Halol plant, after requests from workers. Reportedly, the VRS offer was increased to 100 days of salary per year of work from the previous 40 days of every year of completed service. Dealers, who are preparing to legally challenge the organization over inadequate compensation, have said that job losses to the tune of 9,500 should be expected, as showrooms and service outlets shut down, says the report. 

The company is expected to focus on exporting vehicles from its manufacturing plant in Maharashtra after production is reported to have halted in the Halol plan earlier last month. 

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Topics: Employee Relations, C-Suite

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