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General Motors warns Maharashtra’s blocking could hit investment

Maharashtra, an Indian state, move to block General Motors (GM) from closing a plant and exiting the country defies the state’s business-friendly image and sends a “concerning message” to possible future investors, the U.S. automaker said on Friday.

GM’s comments came after authorities in Maharashtra earlier this week declined the automaker’s application to cease operations at its plant in the western Indian state amid protests by workers who demanded GM to keep production or keep them on the payroll indefinitely.

The decision runs counter to Maharashtra’s business-friendly reputation, a GM spokesman said. “It sends a concerning message to any potential future investors who want to bring jobs and investment to the state.”

GM stopped selling cars in India, the world’s second-most populous nation, at the end of 2017 after years of low sales. It sold one of its two plants in the country to China’s SAIC Motor and continued to build vehicles for export at its second plant until December 24.

In January 2020, it agreed to sell its second factory in the state’s Talegaon district to Chinese automaker Great Wall Motor, but tensions between India and China have delayed the completion of that deal.

GM said it prepared to seek a reversal of the state’s order as soon as possible.

“Effectively, the state’s decision amounts to a requirement that GM either produce vehicles for which there are no customer orders, or pay workers indefinitely for doing no work. We decline both suggestions,” the spokesman said, adding production would not restart.

GM is providing higher than the statutory severance pay to its approximately 1,500 workers at the plant, amounting to nearly two years of salary and is willing to negotiate further, said a source with information of the matter.

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