17-09-2020

Gaining Indian government approval for China-related deals is now expected to take quite some time and although the sale should still happen at some point, GM has not changed its plan to begin winding down the plant's operations next month, they said.

Delays to General Motors' sale of its Indian plant to Great Wall Motor due to tensions between India and China are likely to result in hefty unplanned costs for the U.S. automaker, people familiar with the matter said.

Sources also said severance pay costs could be much higher than usual due to lack of clarity about the deal's prospects and workers' demands for greater relief given the low chances of finding new jobs amid the coronavirus pandemic.The sources were not authorised to discuss the deal and spoke on condition of anonymity.

GM stopped selling in the world's second most populous nation at the end of 2017 after years of low sales but the factory continues to build vehicles for export. Located in the western state of Maharashtra, the plant employs about 4,000.

If workers don't agree to the severance offered, GM will need local government clearance to lay off staff. That is often a long, bureaucratic process which could help stoke worker protests or political opposition, the sources said.