It is sad news, report on the American icon Ford Motors set to close down its two Indian factories at Maraimalai-nagar (TN) and Sanand (Gujarat). Their production add up to less than a quarter of the capacity of 4.4 lakh passenger vehicles and 6.2 lakh engines.
I visited Ford headquarters at Dearborn in 1985 and 1995. During the later visit, there were plans of Ford setting up production facilities in India. The then US Ambassador Frank Wisner, charmed then Chief Minister J Jayalalithaa into inviting Ford Motors to set up shop in Tamil Nadu. In the race to the bottom war of incentives, Ford chose Tamil Nadu. At a glittering function in January 1996 Ford launched its Indian project with the minority participation of Mahindra & Mahindra.
At that time Ford was assembling its Escort model cars at the Nashik plant of M&M. The century-old company was slow to foresee the huge emerging demand for small cars in India and started with its sedan Figo. Hyundai Motors, which watched the launch of Ford on the sideline, managed to get a similar concession from the Tamil Nadu government, but raced to release its Santro small car a year ahead of Ford. There was equally ferocious competition from Maruti Suzuki and the other Korean manufacturer Daewoo Motors’ Matiz.
Ford did help in spreading many of its proven management practices and social concerns that had a beneficial impact on the manufacturing sector. But M&M, not equal for the long haul and increasing investments, withdrew from the partnership.
Ford’s competition further heated up with more manufacturers like Renault Nissan in TN, Toyota Kirloskar in Karnataka and other MNCs crowding the field.
Ford Motors dominated the global manufacturing sector along with General Motors (GM) for a century. Until 1998 it was the second largest (after GM) global corporation. Its Fortune ranking dropped to 21 in 2020-21.
The huge facilities created in Tamil Nadu and Gujarat are grossly under-utilised. An attempt was made to collaborate again with the Mahindras; with the latter also struggling to meet competition, the plan for collaboration was dropped. For some time Ford tried to use the Indian facilities to export its products. The economic slowdown in recent years, exacerbated by Covid-19, seems to have turned the prospects even more dismal. Production during June 2020 had dropped to less than 2800.
Sadly, this pioneer of the assembly line technique which marked a quantum jump in productivity, has been slow in catching up with technology. Japanese Toyota made a great success of its hybrid Prius years ahead of Ford. Even in electric vehicles, this once technology leader is lagging behind.
Following the footsteps of GM, Ford Motors may also be closing shop in India. A sad turn from the bang to the whimper!
