GM warns Indian state’s move to block exit could hurt investment

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In this news, we discuss the GM warns Indian state’s move to block exit could hurt investment

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DETROIT / NEW DELHI (Reuters) – Indian state’s decision to prevent General Motors (GM) from shutting down plant and leaving the country challenges the state’s pro-business image and sends a ‘worrying message’ to potential future investors, the US automaker said on Friday.

GM’s comments came after authorities in Maharashtra earlier this week rejected the automaker’s request to cease operations at its West Indian state plant amid protests from workers demanding GM continue production or keeps it on the payroll indefinitely, according to local media.

The move goes against Maharashtra’s business-friendly reputation, a GM spokesperson said in a statement. “This sends a disturbing message to all potential future investors who want to create jobs and investments for the state.”

GM stopped selling cars in India, the world’s second most populous country, at the end of 2017 after years of low sales. It sold one of its two factories in the country to the Chinese company SAIC Motor Corp and continued to manufacture vehicles for export at its second factory until December 24.

In January 2020, it agreed to sell its second plant in Talegaon district, state, to Chinese automaker Great Wall Motor Co, but tensions between India and China have delayed the deal.

GM said it plans to seek a rescission of the state order as soon as possible.

“In fact, the state’s decision amounts to an obligation for GM to either produce vehicles for which there are no customer orders, or to pay workers indefinitely for not doing work. We reject both suggestions, ”the spokesperson said, adding that production would not resume.

GM is offering severance pay in excess of statutory severance pay to its roughly 1,500 workers at the plant, nearly two years’ salary, and is willing to negotiate more, a knowledgeable source said.

Report by Ben Klayman in Detroit and Aditi Shah in New Delhi. Editing by Mark Potter

Original © Thomson Reuters

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