New Delhi: The Indian unit of US car maker General Motors Co. on Wednesday said it will shut its Gujarat plant to consolidate its business in India, a market that the car maker estimates will grow to 8 million units a year by 2025.
The move may result in more than 2,000 people losing their jobs in Gujarat (this does not include the indirect employment that GM suppliers offer in the region), which also happens to be the home state of prime minister Narendra Modi.
“We will end production at our Halol plant in Gujarat and consolidate our Talegaon plant in Maharasthra,” Arvind Saxena, managing director, GM india said. “Employees will have options to apply for jobs at the Talegaon plant.”
The company has started talks with the union at Halol and plans to adequately compensate them.
GM’s Halol plant has a history of labour unrest but GM denied it had anything to do with the closure of the plant.
Mary Barra, GM’s global CEO said that the company will invest $1 billion in Indian operations as it seeks to completely revamp its India product line-up by 2020.
It plans to introduce as many as 10 models by 2020. GM claimed that new investments will create 12,000 new jobs.
The firm also plans to double its market share in the country by 2020 and plans to export 30% of its production from India.
The new announcement also means that GM will scale down its annual production from 282,000 units a year to 220,000 per annum.
