US automaker Ford Motor Co has infused more than Rs 5,000 crore in its Indian subsidiary, just weeks into announcing its exit from this market.
The funds have been infused in two tranches — Rs 2,175 crore in September and Rs 2,900 crore this month, totaling Rs 5,075 crore, according to financial data sourced through business intelligence platform Tofler.
The reason behind the fund infusion in the Indian subsidiary is not known, but it is likely to be used for settling outstanding payments with dealers and vendors, and providing separation packages to employees.
An email sent to Ford India did not elicit any response till press time Friday. Ford India’s spokesperson could not be contacted over the phone.
At the time of announcing its exit from India last month, Ford had said it was expected to take a pre-tax special item charge of about $2 billion — about $0.6 billion in 2021, $1.2 billion in 2022 and the balance in subsequent years. Of this, the cash charges total about $1.7 billion and will be paid primarily in 2022 towards settlements and other payments, it had said.
With close to $2 billion of accumulated loss and falling volumes in India, Ford Motor was compelled to pull the shutters down on its subsidiary here. The decision has impacted more than 4,000 employees across its manufacturing facilities and corporate offices.
The company is talking to multiple parties to sell manufacturing facilities in Chennai and at Sanand in Gujarat.
Within a month of pulling the plug on the Indian operation, Ford India managing director Anurag Mehrotra had exited the company and joined Tata Motors.
There are speculations on Tata Motors acquiring Ford’s manufacturing facility in Chennai. The Indian company’s executives have met government officials in Tamil Nadu over the matter.
Under new CEO Jim Farley, Ford Motor has taken hard decisions as it tries to compete hard with global rivals. Under Farley, the company had decided to cease manufacturing operations in Brazil earlier this year.
Ford India said in September that it would cease manufacturing vehicles for sale in India immediately. Production of vehicles for export will wind down at Sanand by the December quarter, while operations at Chennai engine and vehicle assembly plants will end by the second quarter of next year.