GM India gets conditional approval from Maharashtra govt for Talegaon plant closure

General Motors India has got an approval from the Maharashtra Government for the closure of its Talegaon plant. While the move brings it a step closer towards settling a deal with the warring union and then inking a commercial agreement with Hyundai Motor India Ltd, GM’s exit from India is far from over. The approval is based on certain conditions that relate to the separation package, seeking a no objection certificate from various agencies and sharing job related details of the workers with the buyer—HMIL.

Hyundai Motor India signed a term sheet with the US automaker for a potential buyout of the latter’s Talegaon facility March 13 this year. A final deal is subject to meeting certain conditions including obtaining regulatory approvals from relevant government authorities and all stakeholders related to the acquisition.

The approval comes even as the General Motors Employee Union and the company remain locked in a protracted legal dispute. The workers allege illegal termination after the company decided to exit. They have been locked in legal battles since 2021. GM first filed an application seeking closure of the plant on 20 November 2020. Subsequently it filed a fresh application on June 27 this year, citing inordinate delay.

“We acknowledge the decision to approve the closure application for the Talegaon site and we are grateful for the support of the Government of Maharashtra for GM’s operations at the site over a number of years,” said a GM spokesperson. GM Union president, Sandeep Bheghade said, the union is seeking legal opinion on the order and hence cannot comment immediately.

The approval includes provision of a settlement package to impacted employees of 110 days of wages per year of service, said the GM spokesperson. “Impacted employees have already received statutory benefits, and we encourage them to come forward to accept the balance of the separation package,” the spokesperson added.

The six-page order was issued by Suresh Dagadu Khade, Minister of Labor, Maharashtra State, on July 5 in response to the application filed by General Motors India on June 27 seeking permission to close the unit. In its application, GM stated that under no condition the “plant can be made functional due to heavy losses.” It incurred a loss of over Rs 9000 crore during the period from 1994 to 2022, The government has therefore, allowed closure if certain conditions are met.As per the conditions stated in the order, the remaining workers will be given the same package as given to earlier workers and GM is required to clear all dues in the next 60 days. The company would need to seek a no-objection certificate and no-dues certificate, permissions etc from relevant agencies as required by the law. Lastly, the order states that the “applicant may share job details of the workers to new incumbents.”“The company in spite of huge losses is giving the same benefits to remaining workers at par with other workers who have opted for a voluntary separation package. Therefore, I have come to the conclusion that in larger public interest the Application of Closure is accepted. This will also facilitate new incumbents to start afresh,” said Khade in the order.