Chennai, Sep 21 (IANS): Ford India Private Ltd, which is shutting down its plant near here, has arrived at a final severance package settlement with the workers union, the company said on Wednesday.

According to Ford India, as per the agreed settlement, it will revise the final severance settlement to an average equivalent of 140 days of gross wages per completed year of service from the ongoing offer of 130 days.

An additional one-time lump sum of Rs 1.5 lakh will also be included in the final settlement.

The cumulative severance for each employee will range from a minimum amount of Rs 34.5 lakh and a maximum cap of Rs 86.5 lakh.

"The revised settlement will translate to an average of about 5.1 years/62 months of salary for each employee (from a minimum of 3.9 years i.e., 47 months to a maximum of 8.7 years i.e., 105 months)," Ford India said.

The formal settlement agreement is planned to be executed before the end of September.

The company will notify employees of the next steps and looks forward to completing the exit formalities by September 30, and will continue paying wages to all employees till the date to support the exit formalities.

In September 2021, Ford India announced its decision to wind down vehicle assembly in Gujarat's Sanand by the fourth quarter of 2021, and vehicle and engine manufacturing in Chennai by the second quarter of 2022.

Ford India had set up four plants in the country -- vehicle and engine plants in Chennai and Sanand.

The company sold its Gujarat facility for Rs 725.70 crore to Tata Passenger Electric Mobility Ltd.

The plant in Sanand includes the entire land and buildings, the vehicle manufacturing plant, along with its machinery and equipment, and transfer of all eligible employees of Ford India's vehicle manufacturing operations.

Ford India will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from Tata Passenger Electric.

Tata Passenger Electric has agreed to offer employment to the eligible employees of Ford India's powertrain unit when the latter stops such operations.