Hyundai Motor’s Acquisition of General Motors Plant in India Hindered by Union’s Demands

Hyundai Motor Group’s acquisition of General Motors’ facility in India is not going smoothly as it is currently facing many challenges in the process. The company is just one of the automobile manufacturers that is venturing into the Indian market, and to expand its business there, it is seeking to buy GM’s production plant there.

However, Hyundai Motor realized that closing the deal was not easy at all despite its efforts. According to The Korea Herald, the South Korean automaker has been aiming to close its acquisition deal for General Motors’ manufacturing facility in Talegaon before this year ends. Still, some 1,000 unionized workers are opposing the transaction.

These are people who were hired by General Motors and former employees of the factory. With the acquisition, they want Hyundai Motor to take them in as well. They are demanding employment at the factory after the takeover.

The unionized workers want to add some terms and conditions to the deal between Hyundai Motor and General Motors. One of their requests is to reinstate employees who were terminated when the factory was shut down.

While the company was not able to comment on this issue last week, an insider with knowledge of the situation said Hyundai has not ruled out the possibility of hiring totally new employees as it prefers a low-cost labor force. It was added that the company is not directly communicating with the union.

When its Indian plant was shut down in 2020, General Motors offered voluntary redundancy for employees. Still, the union rejected the severance package and file a case in court to resolve the matter. In October 2021, the Supreme Court of India ordered GM to pay 50% salary to terminated employees, but it did not comply.

Now Hyundai Motor is in a bind as the term sheet it signed with GM is likely to trigger a controversy. It was indicated in the term sheet that the acquisition will include land and buildings and some machinery and manufacturing equipment at the Talegeon plant. There was no mention of the workers.

Meanwhile, it was in March this year when Hyundai Motor first signed an agreement with General Motors for a proposed buyout of the Indian factory, according to Business Standard. The facility was opened in 2008 and has the capacity to make 130,000 vehicles and 160,000 engines annually.

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