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GM India cannot sell Gujarat Halol Plant until employee settlement

Chevrolet Cruze 2016 Auto Expo

The plant will cease production in the middle of 2016.

GM India has earlier announced that it will stop manufacturing activities at the Halol plant in Gujarat in mid-2016. As things stand now, it makes sense to focus on improving efficiency of a single plant (Talegaon unit in Maharashtra) rather than run two facilities with very low capacity utilization factors.

However, GM India’s plan to sell the Halol plant may have hit a roadblock. Times Of India reports that the Gujarat government has denied the automaker permission to sell the unit till it comes up with a settlement plan for all of its affected employees (approximately 1,100 people work at Halol factory). This move from the government has forced the company to rework its strategy or submit a fresh proposal.

Chevrolet Beat Essentia

GM India is reportedly in talks with SAIC to sell off the Halol plant (image: Chevrolet Beat Essentia concept).

Responding to the publication’s query, GM India stated, “We do not respond to rumour and speculation”. It was reported earlier that GM is working on a deal to sell its Halol unit to SAIC (Shanghai Automotive Industry Corporation). SAIC holds 9% stake in GM’s Indian subsidiary and a primary partner in Chinese market.

TOI reports that the deal with SAIC is also under pressure since the Chinese entity wants an assurance that the fiscal benefits will be passed on to the new buyer. Also, SAIC has reportedly refused to assume any liabilities including existing employees and tax-related cases.

Chevrolet Beat Essentia – Photos

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About the author

Nithyanandh Karuppaswamy

Winner of national level automotive quiz competitions, Nithyanandh aka Nithz jumped into the blogosphere right after gaining a degree in Mechanical Engineering. Love for automobiles and an even greater drive to share his knowledge with the automotive community, Nithz is Deputy Editor at RushLane.

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