Modi-hyped auto hub loses Ford in Gujarat; read about a 'parallel' in US off Boston

 

By Rajiv Shah 

Currently "holidaying" in Somerville, five km from Boston, one of the most high profile cities of the United States, the other day I decided to take a stroll up and down the busy hillock where I stay. Just next to the main road, a two minutes walk, crossing the road and reaching in a small open space, I found a few round shaped boards in yellow. All of them described about what Somerville was and is -- of course in a nutshell.

One of the boards particularly attracted me -- and as a journalist who was based in Gandhinagar, the Gujarat capital, I could connect with it directly. The round yellow board talked of how Ford, one of the largest car manufacturers, had an assembly line at Somerville's Assembly Square, just two miles away from where I live.
Titled "Assembling Cars at Assembly Square", this is what is written on the tin board, "One result of the boom times after World War II: for the first time, many American families had the cash to own a car. Ford Motor Company responded by converting a plant that had produced 20,000 army universal carriers during the war into a huge new auto factory."
It continues: "In 1948 alone, the plant transformed 500,000 tons of iron into 75,000 cars -- enough to stretch bumper-to-bumper from Somerville to Miami. In 1957, after turning out 400 of the famously unpopular Ford Edsels, the plant closed for good."

Modi with Hinnrichs

The reason why this interested me is, in 2011, when I was still in Gandhinagar, Narendra Modi, as Gujarat chief minister, had ensured, in his effort of one up-manship, that Ford set up a plant in Gujarat. Part of his effort to prove it to one and all that it is he who has made Gujarat No 1 business destination in India, Modi shook hands with Joe Hinrichs, Ford Asia Pacific and Africa President. An MoU was signed.

It was declared that, following Tata Motors, which shifted its Nano plant from Nandigram I  West Bengal on being offered a hefty concession, the US MNC Ford Motors would set up a car manufacturing unit at Sanand at a cost of about Rs.4,000 crore on 460 acres land -- the second in the country after its Chennai plant, with the capacity to roll out 2.40 lakh cars and 2.70 lakh engines annually, creating about 5,000 jobs.

US Secretary of State Kerry at Ford plant

Addressing media, Hinrichs said, the first vehicle and engine were expected to come off the assembly line in early 2014, praising "the pro-business environment, the available infrastructure facilities, and access to ports" in Gujarat. True to his known ways of creating a hype, Modi tweeted: "Gujarat is proud to host the biggest facility of Ford outside America worth $1 billion which will provide a total of 36,000 jobs."

Even before the new Ford factory became fully functional, it attracted so much of attention that US Secretary of State John Kerry, during his high-profile visit for attending the Vibrant Gujarat business meet, went all the way to Sanand to address workers at the plant on January 12, 2015. However, the Modi-Ford bonhomie lasted for just about a decade when Ford declared it would close its operations in Gujarat.

Last car being rolled out of Ford's Sanand plant

The Sanand plant of Ford is all set to finally shut the shop within a few days from now. The giant MNC announced early last year its decision to stop car production by December-end, with the engine plant continuing to operate for three more months in order to "fulfil" all the order commitments before winding up the plant operations completely.

Different reports estimated, Ford had invested anywhere between Rs 4,000 to 6,000 crore at its Sanand plant, but its accumulated operating losses of around US$ 2 billion in India in about a decade. The decision to shut down the shop rendered jobless about 3,000 workers -- 2,000 of them permanent -- in sharp contrast to the Modi tweet which claimed the unit would employ 36,000 workers.

Ford's Somerville plant

In September 2021, the last car rolled out of the Ford manufacturing unit, which produced three models -- Figo, Aspire and Freestyle. These cars were created to challenge the dominance of Maruti Swift and Dzire, but failed to put up a fight to Maruti in sales. Ford became the second automobile giant to leave Gujarat -- first one was General Motors, which closed down its unit near Vadodara, in Halol, in 2017. 

The shutdown has come after Tata Motors stopping the production of the much hyped Nano -- dubbed as the world's cheapest car. The cause first major confrontation between Modi and West Bengal chief minister Mamata Banerjee (Ratan Tata on being handed over land in Sanand in 2008 called Modi "good M", and Mamata "bad M"), the car, attracted fewer and fewer buyers every year, and in a decade stopped producing in altogether in 2019.

Workers outside Ford's Somerville plant

It may not be a very good parallel, but a dig into the history of Ford in Somerville, too, revealed a somewhat similar pattern as its counterpart in Gujarat. It's a different matter that in the US I have found that it is considered absolutely normal for a business to wind up. In fact, it is considered a capitalist's right to wind up a unit -- a pattern now sought to be followed in India, too, without earlier pretensions.

The Assembly Square in Somerville is named for the 52-acre Ford assembly plant that used to operate in the area. The factory closed in 1958, but the name still sticks, as the vicinity transformed into a new “Assembly Row” of corporate offices, shopping complex, apartments, and a bus-cum-metro station — all of which came up in 2010s.

Last car being rolled out of Somerville plant

More than 1,100 workers lost their jobs when the factory closed in 1958. The Somerville plant produced multiple models, including the Ford Edsel and popular Fairlane. An original Edsel cost $2,878 in 1958, said a Boston source. Ford abandoned production of the car in 1960 and "swallowed" a $350 million loss. It was referred to as “one of the biggest flops in automotive history.”

Quite like in Sanand, in Somerville too a photograph of the last car rolled off the assembly line at the Ford plant was released -- wherein plant manager EJ Duquette in shaking hands with the driver who took the vehicle, a station wagon, off the line. A Boston site says, the event was "a big sendoff as workers moved on. Some went to other Ford plants in Ohio and New Jersey, the older workers retired on pension, and others tried to find new jobs."