Dealers see 15,000 job loss on US GM's exit, ask govt to intervene
Protesting dealers of General Motors, which is exiting the Indian market, on Tuesday said around 15,000 people would lose jobs due to the auto major's move and the government should intervene in the matter.
Terming the automaker's decision to stop selling cars in India as "clearly thought out conspiracy", the dealers along with their staff members also demanded adequate compensation from the company.
"This is a clear case of conspiracy. The company just kept us in dark while they planned to close operations in India," a dealer, who has dealerships in Noida and Ghaziabad in Uttar Pradesh, alleged while protesting at Jantar Mantar here.
Around 40 dealers and their staff members on Tuesday staged protest here against the company's decision.
A dealer said the government gave all kinds of waivers to the company when it set up shops in the country and now when they are leaving like this, someone from the government should get hold of them.
There is a loss of around Rs 1,000 crore for the dealers and around 15,000 people employed at the facilities are going to lose their jobs so the government should intervene in the matter, he said.
"We are writing to PMO and various ministries through FADA asking them to intervene in the matter," the dealer said.
A majority of General Motors' 96 dealers, which operate around 140 showrooms across India, are unhappy with the company's compensation offer of just around 10 per cent of total investment made by dealers. Another dealer from Jaipur said the company kept them in dark about the impending closure even as they kept on investing on their respective facilities.
"We had even sent our people to get training for the launch of new Beat. Last year they held a meeting and showed us new models which were to be launched in India. So they kept us in dark all this time," the dealer said.
"On top of it, there is take it or leave it attitude from the company. There is one way communication. All we wanted was a mutual agreement on compensation. We have been associated with the company for such a long period," he said.
The Federation of Automobile Dealers Associations (FADA) Secretary General Gulshan Ahuja said their intention is to resolve the matter amicably.
"But if need be, we won't hesitate in taking legal route against the automaker," Ahuja added.
The FADA is already exploring the possibilities of filing class action suits against the American automaker in the US over inadequate compensation.
When contacted, a General Motors India spokesperson said: "GM India is providing our dealer partners with a fair and transparent transition assistance package based on a methodology that is consistent across all dealers."
"This has not changed. The methodology is then applied to the individual circumstances of each dealership. These discussions with individual dealers are confidential," the spokesperson added.
As per the conditions set by General Motors, a dealer who does not accept its offer by July 15 would get only 50 per cent of the compensation amount being offered.
In case a dealer does not accept the offer by September 15, he would not get any compensation at all.
In 2015, the company had announced to invest $1 billion in India to enhance manufacturing operations and roll out 10 locally-produced models over the next five years.
In January this year, the American firm put on hold its investments on new models for India as it undertook a full review of its future product portfolio in the country.
On May 18, General Motors suddenly decided to stop selling its vehicles in India as there was no turnaround in its fortunes here after struggling for over two decades to make a mark.
Swedish Volvo, German Volkswagen all set to drive in flex-fuel vehicles
Keen to promote transportation on alternative fuel like methanol and ethanol, Union Minister Nitin Gadkari on Tuesday said automobile giants Volkswagen and Volvo have shown interest in supplying such vehicles to be run on a pilot basis in the country.
"We had a talk with Volvo...they are ready to supply 50 buses on methanol in Pune and Mumbai," Road Transport, Highways and Shipping Minister Gadkari said.
Gadkari said the project will be on a pilot basis initially, and could be replicated as there was immense potential for running vehicles on alternative fuel like methanol, ethanol and Bio CNG.
The minister said that talks were on with taxi aggregator Ola for running taxis on ethanol.
"Volkswagen is ready to supply flex engine for 100 vehicles if ethanol supply is ensured," he said.
Like flex engine in the US, Brazil or Canada, which can run either on 100 per cent petrol or fuel blended with 22 per cent ethanol, taxis here too can be operated on a pilot basis, he said.
Last month Nagpur, the constituency of Gadkari, had earned the distinction of becoming the country s first city with a fleet of 200 electric vehicles, including taxis, buses, e-rickshaw and autos.
The minister had launched the pilot project for 200 electric vehicles, including 100 of Mahindra s new e20 plus to be run by Ola.
Gadkari said that alternative fuel had huge potential and can cut on huge Rs 7 lakh crore import bill on crude. He said ethanol could be produced in large quantities in Uttar Pradesh and Bihar, and taxis running on it could save Rs 4.5 per km on fuel charges.
The minister said, in Stockholm 400 buses were running on ethanol which can be easily produced in India, while Gujarat State Fertiliser Corporation could produce methanol, which is produced from coal gasification. "In fact we are thinking to promote alternative fuel in shipping sector as well and vessels could be run on methanol which is cheaper than LNG," he said, adding 500 barges were brought for Ganga which could be run on these if all goes well.