Chennai: On Henry Ford Road in Maraimalai Nagar, about 50 km from Chennai, the once-bustling Ford car manufacturing plant now stands in silence, with only security personnel visible outside its gates. The quiet is made more striking by the busy, noisy Grand Southern Trunk (GST) Road just a short distance away.
The plant has remained a forlorn sight since Ford India halted operations in 2021. However, the company’s recent decision to restart production at the Chennai facility is likely to change that.
While the plant has remained untouched since operations ceased, the surrounding GST Road has witnessed tremendous development. Three new flyovers are now operational, and a bus stand at Kelambakkam, about 14 km from the plant, highlights how this once industrial zone is now thriving with residential growth. This transformation is underscored by the presence of a giant departmental store near the sprawling 350-acre Ford facility.
So, what inspired the state to encourage Ford to return? Sources in the Tamil Nadu government told ThePrint that the high value of the property was the main driving factor.
“The 350 acres, situated in such a prime area, needed to be utilised. We didn’t coerce Ford to return, but we encouraged them to decide how best to employ this asset,” a government insider said to ThePrint, adding that the Minister for Industries T.R.B. Rajaa himself visited the US twice last year to hold discussions with Ford
On 13 September, just a day before Tamil Nadu Chief Minister M.K. Stalin returned to Chennai after a 17-day trip to the US aimed at attracting investment, Ford announced it had submitted a letter of intent to the Tamil Nadu government, confirming its intention to use the Chennai plant for manufacturing for export.
Speaking to ThePrint, Rajaa said that it was a massive psychological boost to the state and the industry, reinforcing the resurgence of Tamil Nadu as a global manufacturing giant.
“Ford’s re-entry is expected to drive significant job creation, both directly and indirectly, offering fresh opportunities for value-added employment and advanced manufacturing practices,” Rajaa said.
Though speculations are rife that Ford would commence manufacturing EV vehicles at the plant for its global market, the company has not officially confirmed it.
Expressing the company’s intent to leverage India’s manufacturing expertise to serve new global markets, Ford International Markets Group President Kay Hart stated in a LinkedIn post on 13 September that the company will share more details in due course. This will include information about the type of manufacturing they will undertake and the specific export markets they will target.
However, automotive and mobility experts hope that Ford would concentrate only on EVs since it has a global demand.
Nevertheless, Ford India’s former executive Director Vinay Piparsania told ThePrint that Ford’s arrival would only benefit Tamil Nadu as they bring in world-class manufacturing techniques and are not entering the Indian market, but only using Chennai’s plant to manufacture products for exports.
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How Ford was brought back Chennai
Soon after Ford closed down its operations in India 2021, it sold its Sanand manufacturing plant in Gujarat to Tata Motors in August 2022. However, it did not sell its plant at Maraimalai Nagar in Chennai.
Official sources privy to the developments said that in 2023 they realised that Ford was not interested in selling the Chennai property, unlike the property in Gujarat. Eager to put the land to use, they began talks with Ford about the land.
In July that year, Rajaa made a visit to San Francisco and held talks with the Ford officials on ways to use the plant in Chennai. However, Ford then requested time to evaluate the situation.
“Over the next six months, at least two other car manufacturers approached Ford. By the end of 2023, Ford had almost finalised a deal with one of the manufacturers to sell the property but changed its mind at the last minute and dropped the plan,” one government insider said.
It’s then the company had sought a feasibility study to manufacture cars at the plant, which has led to its re-entry into Tamil Nadu.
Bringing Ford back to Tamil Nadu was a result of strategic, persistent efforts by Stalin and Rajaa. During the 17-day visit to the US, the CM himself met Ford’s Kay Hart and others from the company.
Rajaa confirmed that it was an outcome of year-long discussions, negotiations, and follow-ups with Ford’s leadership both in the US and India.
“I myself visited the US twice in the last year to hold key discussions and ensure Ford’s re-entry. This focused and sustained approach, coupled with Tamil Nadu’s reputation as an automotive and EV manufacturing hub, ultimately led to Ford’s decision to come back,” Rajaa told ThePrint.
Apart from the efforts of the officials and ministers, the goodwill gesture of the state government also played a part in Ford’s return.
“When they decided to leave, we did not hold them back or cause any inconvenience. The process was so smooth. Even when the employees were protesting, we held talks with them and ensured a smooth passage. They were impressed with this kind of approach,” another government source told ThePrint.
However, the decision to leave India was not because of any policy decisions of the government but, because of their shrinking demands in the global market.
“They are used to making giant cars and their market demand for the cars manufactured in India was reducing. That’s why they left India and they always had good opinions about the state and their manpower,” said former director Piparsania.
According to Raaja, Ford still views Tamil Nadu as a strategic, export-oriented location that not only offers a solid base for production, but also provides strong opportunities for collaboration with MSMEs and other industries.
“Ford’s management has been highly appreciative of Tamil Nadu’s industrial environment and the support extended by the government. The company recognises Tamil Nadu’s unmatched potential as a global automotive and EV hub, with a well-developed supply chain and manufacturing ecosystem,” the minister said.
Ford’s relationship with Tamil Nadu
At the Global Investors Meet 2024 in Chennai, Anand Mahindra, Mahindra Group Chairman, fondly remembered how Ford chose Tamil Nadu as its location way back in 1995.
According to him, the state was not Mahindra Group’s first choice when Ford started its operations in India in a joint venture with the group.
“While people from Mahindra group were looking for possible locations in the north, it was the people at Ford who told us that Tamil Nadu is the place to be,” he remembered, adding that his experience with Ford enabled him to establish the Mahindra Research Valley in Chennai, and, later, set up the Mahindra World City, which is located just 10 kilometers away from the Ford plant in Maraimalai Nagar.
After 29 years, Tamil Nadu is once again the site for Ford to restart its manufacturing for export. Although the Ford plant has remained unchanged over the past two years, the surrounding area has undergone a remarkable transformation. The four-lane GST Road has been expanded to eight lanes, and commercial and residential complexes have mushroomed in the vicinity.
Former workers of the Ford, who settled in and around Maraimalai Nagar, say they have trouble believing the fast-phased growth in and around the plant.
“When I started working at the plant in the early 2000s, there were hardly any shops to purchase anything or houses. I had to travel all the way to the city to look for a place to stay. But, now there’s a huge departmental store, where you can get anything and everything, and it’s located just 100 metres away from the plant,” Senthil Kumar, 54, a former employee at Ford, said. After much searching, though, Kumar had managed to purchase a property at Maraimalai Nagar and moved in along with his family.
Even during the final day of Ford’s operations in Chennai—when it saw protests by the plant’s employees over retrenchment financial packages—there were hardly any restaurants or major chains around the plant.
There used to only be two pushcart vendors—one selling a variety of rice and the other offering tea—along with a small tea shop across the road. Now, however, at least 10 tea shops, hotels, grocery stores, and chains of restaurants have come up near the plant.
The Ford plant—which is to become operational soon—had the capacity to produce around 2 lakh vehicles and 3.4 lakh engines.
Now, 29 years since they started their operations in India and over 3 years after they left, one thing is clear—Tamil Nadu is ready to embrace Ford with the same warmth and enthusiasm it had shown in 1995.
(Edited by Zinnia Ray Chaudhuri)