Tensions between India and China are so high that private Chinese automaker Great Wall Motors, which was set to buy the U.S. General Motors plant in India by the end of this year, has called it quits.
According to the Times of India, GM intends to sell their Talegaon plant in the western Indian state of Maharashtra to a Chinese car company. GM had hoped to sell the plant to China’s Great Wall Motor Company for more than 20 billion rupees (about $270 million), but so far, the news has been called off.
As tensions rise between India and China, the Indian government will strictly control investments from China and other neighboring countries. After the border conflict between India and China in June this year, the Indian state of Maharashtra announced that they would suspend the sale of General Motors to Great Wall Motor. In response, GM responded that if Great Wall Motors did not purchase the Talegaon plant in the western Indian state of Maharashtra, they would simply close the plant.
According to various Indian media reports, if the deal fails, GM will have to bear its own liabilities for the closure of the plant, such as severance pay for workers. The Talegaon plant employs a total of 1,800 people. GM has already told workers that it will pay their final wages until Jan. 25 next year, and if they challenge the severance pay, GM could be caught in legal action.
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