Ford India coercing dealers to sign non-disclosure agreement: Fada
The Federation of Automobile Dealers’ Association (Fada), the automobile dealers’ apex body, in a letter to the minister of heavy industries, Mahendra Nath Pandey, has alleged Ford India is making “coercive efforts” to get its dealers to sign a non-disclosure agreement (NDA), imposing “unreasonably tight timelines, under economic duress”.
It has urged the government to form a task force to monitor the compensation structure being worked out by Ford India for its dealers in the country. The management of the local arm of the US automaker is in discussion with its dealers.
In the letter to the minister, Fada President Vinkesh Gulati asked the government to instruct Ford India to keep the industry body in the loop regarding the compensation structure.
Earlier this month, the Detroit-based automaker said it would stop vehicle production at its two plants in India and sell only imported vehicles as part of a restructuring exercise.
Its decision will impact over 4,000 employees and about 170 dealers who operate more than 300 outlets.
“We humbly request your Ministry’s intervention ... Create a task force which takes day-to-day updates from Ford India to monitor the compensation plan for automobile dealers and dealership employees,” Gulati said in the letter.
Besides, he has asked the ministry to make sure that Ford India indemnify dealers from various consumer and civil cases, both under pendency and against any future cases that may arise directly or indirectly out of the automaker’s restructuring announcement.
“Ford India is forcing its dealers to first sign Nondisclosure Agreement (NDA) latest by September 14, 2021, before any compensation package is worked out. Many Ford dealers have directly or indirectly requested Fada to take up the matter for an amicable resolution,” he noted.
The contents of the NDA, pointed out Gulati, are broad and do not mention whether they would take into account factors including damages owing to the costs of idle establishment and infrastructure, maintenance, employee retrenchment claims, etc.
According to Fada, close to 464 automobile dealers have lost ~2,485 crore over the past five years and some 64,000 employees have lost their jobs due to the exits of multinational automakers from India.
Among those that have quit India’s automobile market, the investment of ~2,000 crore made by the dealers of Ford India, the fifth-biggest and latest auto company to wind down its manufacturing and sales operations, tops the chart, shows the data compiled by Fada.
The dealer body is seeking legislation for protecting dealers’ rights. This would ensure that adequate information is available to the customers and protect dealers from sudden exits by companies, the letter said.