GM's production at Halol plant comes to a halt

US auto major General Motors (GM) on Friday stopped production at its first Indian plant in Halol, Gujarat, as part of consolidation of manufacturing operations in the country.

The company's arm, General Motors India will now operate all of its manufacturing operations from its second plant at Talegaon in Maharashtra.

GM India President and Managing Director Kaher Kazem said the company was mindful of the impact on employees at Halol.

"We have committed to support them through this necessary transition with generous separation payments or the option of continuity of employment at Talegaon," he said in a statement.

Kazem said a range of additional support measures had been put in place for employees who opted for "significantly enhanced" separation payments and those who would transfer, including tax and financial advice and pre-transfer visits to Talegaon.

In 2015, the US auto major had announced that it would cease production at the plant, a move that affected around 1,100 employees.

The Halol unit, which had a total annual manufacturing capacity of 1.1 lakh units annually, was originally planned to be shut by mid-2016.

GM has been in talks with China's SAIC Motor Corporation to sell the plant.

A term sheet was signed a few months back to evaluate a possible deal but the Chinese firm stated that a final takeover would be subject to government approvals, settlement of labour and all other pending issues by the American auto major. In 2015, GM had announced plans to invest $1 billion to enhance manufacturing operations and roll out 10 locally produced models in India.

However, struggling to make a turnaround in India, the company has put on hold its investments on new models for the country as the US auto major undertakes a full review of its future product portfolio here.

It hasn't put any timeline for lifting freeze on investments on the new products.