From Peugeot to GM, the saga of plant closures

Eicher Polaris is the latest to join the list of plant-closure casualties in India’s auto space.

And while two-thirds of employees at the Multix facility in Jaipur have been placed in Eicher group companies, employees in other similar situations have not been as fortunate.

It is also ironical that this subject is being discussed in the May Day week, where the spotlight is on workers around the world. Apart from this, it is also a year since General Motors shut down its Halol operations in Gujarat late last April.

Workers were given the option of moving to the company’s other facility at Talegaon near Pune and while many did, it was not the easiest of decisions. Some chose to stay back and it is still not known if they found alternative jobs.

‘General’ troubles

It was no secret that GM was doing badly in India, even though it was among the earlier entrants when the gates were thrown open to international car-makers. For over two decades, the company struggled to make a mark even while the likes of Suzuki and Hyundai surged ahead.

GM, of course, has been restructuring operations across the world, which have been accompanied by plant shutdowns. Besides India, the company has also brought down the shutters in Australia, Thailand, Russia and South Africa. China and Latin America are clear priorities apart from the US.

GM was one among three early entrants into India’s auto space, with the other two being Peugeot and Daewoo. It is quite a bizarre coincidence that all exited, albeit in different circumstances. Peugeot has, of course, decided to make a comeback and its second innings will resume in 2020.

French disconnect

The French auto-maker was the first to call it quits barely three years after it had set up shop at Kalyan near Mumbai. The first signs of trouble surfaced in the form of labour strife in 1996, which saw the plant closed for some months.

When operations resumed, it was clear that Peugeot had lost time and money. Further, it was running short of kits to assemble its cars. The company persevered and got its diesel 309 launched, but soon found itself locked in a spat with its local partner.

After the dust settled and things looked better, Peugeot was all set to restart operations on a stronger footing. However, its headquarters in Paris had enough of the Indian experience where losses were mounting with no viable solution in sight.

In November 1997, Peugeot announced it was exiting India, which meant that over 1,500 workers were rendered jobless. Dealers, vendors and customers were also left high and dry. It was a very difficult time even while employees tried their best to keep operations going for a while.

Daewoo woes

In the case of Daewoo, the woes of the parent company were threatening to cripple operations here even while the Indian management pulled out all stops in keeping employee morale up. However, it was only a matter of time before bankruptcy in Korea took its toll on India and operations at the Surajpur facility near Delhi came to a standstill.

GM acquired Daewoo globally when the initial bidder, Ford, decided to stop its plans. It then tried hard to take over Surajpur too but nothing materialised as the plant slowly faded into oblivion. In the interim, there were entrepreneurial efforts to reboot the facility, but nothing much emerged.

As in the case of Peugeot, Premier Auto’s plant in Kurla had its share of labour trouble in the mid-1990s, which saw operations hit. By now, Fiat had taken charge of this facility, which was home to the Uno. Even after work began in full earnest, the Italian automaker just could not crack the market even while products like the Palio hit the bull’s-eye initially.

After a long, futile stint at Kurla, Fiat joined hands with the Tatas and relocated operations to Ranjangaon near Pune. It was a sad end to a decades-old facility, which had played a big role in laying the base for India’s automotive journey way back in the 1950s.

Fading icons

Fiat was also part of this ride with Premier during these years, which explains why the brand is still on top-of-recall even after failing to make a mark here. This is equally true for the Premier Padmini taxi in Mumbai whose production stopped quite a while ago and only a few hundreds are left on the roads.

Like Premier Auto, Hindustan Motors is another legacy auto brand that ran its course and shut down its West Bengal plant in May 2014. Its Ambassador model was one of the best known symbols in India but could not take on competition beyond a point from international brands.

HM has now sold the Ambassador brand to Peugeot, which has taken over its Chennai plant for its new India chapter. How this will be leveraged in its product range here remains to be seen.

As in the case of the Padmini, the Ambassador (better known as Amby) still operates as a taxi on Kolkata’s roads, where its yellow colour is a reminder of New York’s cabs. With the closure of the Uttarpada facility in West Bengal, workers at the HM plant were also affected but there was really no way operations could continue.

It was also in Bengal that a near-complete car plant was forced to slam brakes on production and relocate elsewhere. Like its famous resident, Tata Nano, Singur also became popular as it was the centre of all the protests. Eventually, Tata Motors decided to shift the Nano out of Singur to Sanand in Gujarat.

Plant closures are painful and can cause havoc in workers’ lives. Hopefully, Eicher Polaris will be the last such instance in India.

COMMENT NOW