The deadlock continues in the settlement of Ford Chennai employees’ compensation package as the US automaker and its Chennai factory union are yet to agree on a final compensation package. 

Amid the continuing stalemate, Ford stopped its car manufacturing operations at its Maraimalai Nagar factory near Chennai on July 20, as part of its plans to exit from vehicle manufacturing operations in India. However, it continues to make some vehicle parts and this will continue till next month. 

“The last date of manufacturing operations for FCSD (Ford Customer Service Division), will be August 31, ” the company said. 

Compensation package

As a result of the settlement of discussions (43 meetings with the Union and 17 meetings in front of the Labour authorities, as claimed by the company) between the Ford management and the Union, the company has agreed to offer 124 days of average equivalent wages per completed years of service (subject to the minimum amount of ₹30 lakh and a maximum cap of ₹80 lakh). 

The company claimed that its offer is significantly higher than the compensation prescribed under the Industrial Disputes Act, 1947. It also agreed to continue the medical insurance coverage till March 2024 as per current policy terms and conditions. 

Employee Union’s demand

On July 20, the Chennai Ford Employees Union (CFEU) sought a revised compensation package. The Union’s revised demands included 185 days of average equivalent wages per completed year of service calculated on the basis of 26 days per month, the inclusion of an apprenticeship period in the service year and fixation of a minimum package at ₹50 lakh and no cap on the maximum package. 

But, Ford described the revised demands of the union as “not significantly different from the earlier unreasonable demand.”  However, a representative of CFEU told BusinessLine that they have already lowered their demand from 295 days to 185 days, which is reasonable, and they are willing to discuss the same with the company to arrive at a final solution. 

“We are ready to discuss the revised compensation package with the company. But they have not come up with any counter offer to our revised demands,” he added. 

“If the Union does not come forward to finalise the terms, the company will be forced to launch its offer as a VSS package for the employees. Further, the company will no longer engage in any further bilateral discussions and will take appropriate legal procedures as next steps,” it said in a statement. 

 

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