Tata Motors may buy both manufacturing units of Ford, both companies are in initial talks


Tata Motors is in initial talks to buy two of Ford's manufacturing units in India. Ford's plants are located in Sanand and Chennai in Gujarat. If this deal is done between the two automakers, then this will be the second property of Ford to be bought by Tata Motors.

Domestic auto major Tata Motors is in preliminary talks to buy Ford's plants in Tamil Nadu and Gujarat. Last month, the American car giant had announced that it would stop manufacturing cars in India and also shut down both its production plants in the country. For information on the status of the Tata Motors-Ford deal, let us tell you that if Tata Motors buys their plants after successful negotiations with Ford, then this will be Tata's second asset purchase from the American automaker. Earlier in March 2008, the Tata group bought Jaguar Land Rover from Ford for $2.3 billion.

Several media reports have mentioned that the Tamil Nadu government is in discussions with the Tata group on a possible acquisition of Ford India units in Chennai's Maraimalai Nagar. Also, Tata Sons Chairman N Chandrasekaran held talks with Tamil Nadu Chief Minister MK Stalin and State Industries Minister Thangam Thennarasu on Wednesday. Though the details of the high-level talks were not disclosed, this is the second time in two weeks that Tata Group officials are meeting the CM. Earlier on September 27, Girish Wagh, executive director of Tata Motors, met Stalin.

At present, Tata Motors, India's largest automaker, does not have any production plant in Tamil Nadu. However, it has a production plant in Gujarat, which is very close to Ford's production plant. More importantly, the state of Tamil Nadu wants to find a new owner for Ford's units so that it can save jobs, and small and medium enterprises (SMEs) don't have to be impacted by Ford's decision to shut down manufacturing plants. . American auto major Ford decided to leave India after suffering a massive $2 billion loss over the past 10 years.

Discussions are on and Tata Motors may decide not to seal the deal. A Tata Motors spokesperson said Chandrasekaran had a "courtesy meeting" with the chief minister, but declined to divulge further details. "We are exploring possible options for our manufacturing facilities," the publication quoted an unnamed Ford India spokesperson as saying. Siddharth Khemka, head (research) at Motilal Oswal Financial Services, told the daily that the transaction makes sense for Tata Motors as it would be a distress sale with few gains expected from the state government.