M&M blamed for loss of 8,300 US jobs

While directly holding city-based utility vehicle and tractor major Mahindra & Mahindra responsible for a potential job loss to the tune of 8,300 in the United States, its former partner Global Vehicles has called for stricter actions.

Global Vehicles USA, Inc (GV), which was to handle importing, marketing and distribution aspects of the pick-ups from Mahindra, has requested the states of Florida and Georgia to hold administrative hearings to determine whether the Indian company and its US employees are violating state motor vehicle franchise laws.

By the middle of this year, Mahindra had opted out of the agreement with GV, following growing escalation in tension between the two partners. GV had sued M&M for continuously delaying launch of pick-up trucks which were supposed to hit the US showrooms a few months ago.

John Perez, CEO of Global Vehicles, said: "We are ready to sell trucks and that remains our goal. By our calculation, Mahindra's delays and disruptions are putting more than 8,300 potential jobs at risk at our dealers, at the ports, in the trucking industry and throughout the supply base."

Global Vehicles also has invoked the arbitration clause in its contract with Mahindra, and sued Mahindra in Georgia, to protect its contractual rights. Both cases are pending.

An email query to Mahindra went unanswered at the time of going to press. M&M, which had stated earlier this year that it was on track to launch its trucks before December, has refused to provide any guidance on new launch dates of its vehicles in the US.

Global Vehicles has been the exclusive US distributor of Mahindra vehicles since 2006, and the company recruited a network of 347 dealers who are prepared to sell Mahindra pickups. These dealers have collectively invested $100 million preparing for the launch.

GV said M&M had by suggestion through a spokesman stated that it may do business in the future with some dealers but not all of them. GV had also accused M&M of trying to acquire rights for dealing with its dealers directly, thereby wiping out the involvement of the US company.

Frustrated at being at the receiving end in the tussle, some of these dealers had even agreed to take up franchises of other vehicle brands such as Kia and Subaru, while many more evaluate similar opportunities.