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Tata Motors to takeover Sanand plant; MoU with Ford and Gujarat government

Tata Motors has signed a Memorandum of understanding with the Government of Gujarat for the potential acquisition of Ford India Pvt Ltd’s Sanand vehicle manufacturing facility. The acquisition is set to include land and buildings, vehicle manufacturing plant and machinery as well as the transfer of all eligible employees. The acquisition will be “subject to the signing of definitive agreement and receipt of relevant approvals.” Following a deal being struck Ford India is expected to lease back the land and building s of its powertrain unit from Tata Motors to continue powertrain manufacturing operations.

Tata Motors’ subsidiary Tata Passenger Electric Mobility Limited (TPEML) on Monday signed a tripartite memorandum of understanding (MoU) with Ford India Private Limited and the Government of Gujarat for takeover of Ford’s passenger vehicle manufacturing plant at Sanand.

Signed between Gujarat government’s Additional Chief Secretary (ACS) – Industries, Rajiv Kumar Gupta, Tata Passenger Electric Mobility Managing Director, Shailesh Chandra and Ford India Pvt. Ltd.’s Transformation Officer and Country Head, Balasundaram Radhakrishnan.

With this, Ford India’s Sanand plant paves way for manufacturing of electric vehicles (EVs) by Tata Motors’ subsidiary TPEML.

The chief minister’s office (CMO) on Monday stated that the MoU also entails continuation of the state support agreement signed between Gujarat government and Ford India Pvt. Ltd. in 2011, which now includes Tata Passenger Electric Mobility Limited.
As part of the MoU, Tata Motors would take over land, plant building, machinery, and vehicle assembly from Ford India Pvt. Ltd., along with all workers working at the plant. There are currently 3043 direct jobs and 20,000 indirect jobs being provided at the plant in Sanand.

Of the total 460 acres of land, Ford India’s vehicle assembly plant is spread across 350 acres while the engine manufacturing plant is across 110 acres. However, Ford India will continue to manufacture engines at the Sanand plant which will be leased to the company by Tata Motors. As a result, water, electricity, effluent treatment plant, and other utilities will be commonly used by the two occupants.

The CMO stated that the whole takeover process was completed within 90 days due to Chief Minister Bhupendra Patel-led Gujarat government’s “positive approach”.

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