Ford India forcing its dealers to first sign NDA : claims FADA, seeks union minister’s intervention

New Delhi : Federation of Automobile Dealers Associations (FADA) on Thursday claimed that Ford India was forcing its dealers to first sign Non-Disclosure Agreement (NDA) latest by September 14, 2021 before any compensation package was worked out and sought intervention of Union Minister of Heavy Industries Dr Mahendra Nath Pandey.
In a letter written to Mr Pandey, copies of which were made available to media here, FDA President Vinkesh Gulati said,”Ford India is forcing its dealers to first sign Non-Disclosure Agreement (NDA) latest by September 14, 2021 before any compensation package is worked out. ..On reading the NDA, we found that the definition of Confidential Information is extremely broad and does not explicitly mention the scope of the discussions that Ford intends to undertake with the Dealers. As a consequence, it is unclear if the discussions would include the critical points of concern vis-à-vis the Dealers which include damages towards costs of idle establishment and infrastructure, maintenance, employee retrenchment claims, damages towards loss of opportunity and restrictions in availing dealerships of new OEM in the existing infrastructure, damages arising out of a compulsory restricted nature of business imposed namely stopping of sales and only continuation of parts and service and damages owing to loss of reputation and goodwill coupled with loss owing to the expense of reestablishing customer base and goodwill.”
Such coercive efforts on Ford’s part to get their channel partners to sign an NDA with an imposition of unreasonably tight timelines, under economic duress was not the right approach and adversely impacted dealer interests, he said.
Mr Gulati said the FADA had also written to Ford India President and MD Anurag Mehrotra requesting him to share the broad contours of the compensation package which they would have already decided upon.
He urged the minister to create a task force which takes day to day update from Ford India to monitor the compensation plan for automobile dealers and dealership employees, instruct Ford India to keep FADA in loop for dealership related issues and compensation structure, initiate a formal discussion on Automobile Dealers’ Protection Act, and its importance to protect small and medium enterprises, their skilled employees and the customers and make sure that Ford India indemnifies dealers from various consumer and civil cases, both under pendency and against any future cases that may arise directly or indirectly out of Ford’s restructuring announcement.
On September 9, Ford India had announced plans to end its car manufacturing operations in India, shutting down plants in Maraimalainagar, near Chennai in Tamil Nadu, and Sanand Gujarat.
On Wednesday, Ford India officials had reportedly met its principal dealers to work out a compensation formula before its exit from India’s automobile market.