News: 15,000 job loss from GM India exit: Dealers want govt intervention

Employee Relations

15,000 job loss from GM India exit: Dealers want govt intervention

The exit of General Motors India is likely to result in a job loss of around 15,000, say the dealers of the organization. They are demanding better compensation and government intervention in the matter.
15,000 job loss from GM India exit: Dealers want govt intervention

Dealers of General Motors India have stated that they expect about 15,000 jobs to be wiped off from the market due to the company’s exit, states a news report. They further want government intervention in the matter as they are upset with the amount of compensation being offered to them.

The 96 dealers, who run 140 showrooms in the country, are reportedly dissatisfied with company’s offer of 10% of the total investment made. The question of unsold inventory has also been bothering them as well. As per the terms and conditions set by General Motors, dealers who fail to accept the current offer by July 15, are liable to get only half the compensation amount offered; and those who fail to accept it by September 15, would not get any compensation.

“The company arrived at the amount taking into account factors such as the size of the dealership’s facilities by area, and the age of the construction for the purpose of depreciation” a dealer has been quoted saying in this report.

Furthermore, the same report adds that General Motors India has sought a binding commitment from dealers to continue with their dealerships till December 31, if the latest compensation proposal is accepted.

The dealers, protesting at Jantar Mantar, are reportedly miffed at the secrecy with which the exit was planned, decided and announced.

Terming it a “clearly thought out conspiracy”, a dealer has been quoted saying in the report, “This is a clear case of conspiracy. The company just kept us in dark while they planned to close operations in India... There is a loss of around Rs 1,000 crore for the dealers and around 15,000 people employed at the facilities are going to lose their jobs so the government should intervene in the matter, he said.

We are writing to PMO and various ministries through Federation of Automobile Dealers Association (FADA) asking them to intervene in the matter.” Another dealer says that they were shown new car models last year, and he had sent his employees for training for the launch of the new Beat as well. “On top of it, there is take it or leave it attitude from the company. There is one-way communication. All we wanted was a mutual agreement on compensation. We have been associated with the company for such a long period," he says in the report.

A New-Delhi based dealer corroborates this version and says here, “We were told about the launch of the new Beat (hatchback) just 10-15 days before that (the decision to stop sales in India), and were also asked to train our staff about the vehicle.”

According to the report, the dealers are of the view that General Motors CEO Mary Barra’s first visit to India in May 2014 is likely to have set the ball rolling for the closure of its Indian operations, and they were kept in the dark intentionally. 

The Federation of Automobile Dealers Associations (FADA) Secretary General, Gulshan Ahuja, indicated that it is best to solve the matter amicably, and if a settlement can be reached before initiating legal recourse.

“But if need be, we won’t hesitate in taking legal route against the automaker,” he added.

The FADA is reportedly exploring the possibilities of filing class action suits against the American automaker in the US over inadequate compensation, says the report. 

As reported earlier, General Motors had abruptly announced the closure of its Indian operations in May, and offered Voluntary Separation Service (VSS) to its employees. The company is now expected to focus on export of vehicles from its manufacturing plant in Maharashtra, after the production at the first plant in Gujarat ceased last month.

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Topics: Employee Relations, C-Suite, #Jobs

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