COVID19 Impact – GM Fires all employees of Pune Plant

Automobile Sector begins layoffs with General Motors Firing All 1419 Workers From its Pune Factory. One of the leading automobile exporters in India-General Motors has decided to fire all 1419 workers from their factory located at Pune. This was done without any prior permission from the Labour Ministry as per reports.

Does this mean the beginning of automobile layoffs in India?
General Motors has fired all 1419 employees from their Talegaon factory in the outskirts of Pune. By pasting a notice at their factory entrance, this decision was announced. The notice by General Motors stated, “Since the lay-off has been declared largely because of Covid-19, being a natural calamity, no prior permission from the appropriate authority has been sought, nor is the same necessary under section 25-M of the ID Act,”

Before taking the afore mentioned decision, the company did not take any prior permission from the Govt and Labour Ministry. As per the notice, they have invoked section 25 of the Industrial Dispute Act and hence no such permission is needed. The impacted employees will be provided with 50% of their basic pay and allowance, as per their last drawn salary. Sandeep Bhegade-The President of General Motors Employees Union said that they will contest this decision and will file a case at the court.

The Reason Behind Firing Employees by General Motors
General Motors has its one and only India based factory located in Talegaon-Pune and is used for exporting their cars from India to other countries. Since December 2020, the production was stopped at this factory. General Motors had stopped selling cars in India-the Chevrolet series in 2017, and only exported cars from their two factories-Halol in Gujarat and Talegaon in Pune. Halol factory was acquired by MG Motors in 2019. As General Motors decided to fully quit India, talks were there between General Motors and Shanghai based Great Wall Motors for a possible acquisition of the Talegaon factory. This deal was postponed due to the border and diplomatic tension between India and China. Apparently General Motors is in no mood to restart their production as all the employees are fired from the Talegaon factory. The employees are left with the only hope that the Talegaon factory gets acquired by any auto major, and the production resumes.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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