Sacked GM workers sue company

A trade union in India has sued General Motors’s local unit and its global CEO for failing to pay court-ordered compensation to sacked factory workers, deepening the US carmaker’s struggles to exit India years after it shuttered local operations.

GM stopped selling cars in India in 2017 after years of low sales, but its complete exit from the market has been stalled by complications including legal tussles with workers and failure to find a buyer for a plant in the western state of Maharashtra after talks with China’s Great Wall Motor collapsed in 2022.

GM and the factory workers, who allege illegal termination after the group decided to exit, have been locked in legal battles since 2021. The latest filing signals an escalation in the dispute as workers accuse GM’s India unit and its executives, including CEO Mary Barra, of failing to follow court orders.

In a filing to the Bombay’s high court dated January 16, the General Motors Employees Union of 1,086 factory workers states the company failed to pay them a compensatory 50% of salary starting April in 2022, as ordered by a local industrial court while it continues to hear the dispute, the documents show.

A union leader said GM so far owes the workers about 250-million rupees in wages, based on the industrial court’s order.

A GM spokesperson said the company remains “very confident” about its legal position. “GM is continuing to explore options for the sale of the (plant) site,” he said.

In earlier court filings, GM said the industrial court acted beyond its power in ordering the compensation. The group said previously it tried to settle the issue amicably and offered workers a generous severance package.

The union disagreed, and said GM continues to “blatantly violate” the industrial court’s order by not paying the workers a single cent. In its latest filing, the union urged the court to hold the company and its executives in contempt, and punish them with imprisonment.

“The workers are unable to feed their families, pay for medical expenses, pay for their children’s education,” the union said in the filing, which has not previously been reported. The lawsuit is likely to be heard in coming days.

India has been a graveyard for some Western carmakers, especially US companies, that struggled to break the dominance of Japan’s Suzuki Motor and South Korea’s Hyundai Motor, which together hold a market share of about 60%. Like GM, Ford Motor ceased operations in India in 2021.

GM stopped selling cars in India at the end of 2017 but one of its two factories continued to produce vehicles for export until December 2020. After that GM ceased all operations and moved to close the plant in Maharashtra, but it has not received permission.

The state government has rejected applications by GM to close the plant — a move that the company has previously said sends a “concerning message” to potential future investors.

Reuters