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GM to expand operations in Gujarat

Pradeep Mallik in Ahmedabad

Amid reports of some multinational giants opting to stay out of the state, General Motors says it has plans to expand operations in Gujarat.

General Motors India, a fully owned subsidiary of General Motors Corporation of the US, has a manufacturing facility at Halol, near Vadodara, about 110 km from Ahmedabad.

It produces the German-engineered Opel models of cars in the luxury segment.

"Our capacity is 2,500 units a year. Currently we are working one shift, and in three years' time I see us working two shifts. Besides, our capacity can be doubled if need be. We are here to stay," GMI president and managing director Aditya Vij said.

Vij was in Ahmedabad Thursday for the nationwide launch of the latest offering from the GMI stable, Opel Swing.

At a time when other multinationals are reportedly against moving to this state for the lack of "social infrastructure", Vij said GMI executives enjoyed working in Gujarat.

"My predecessor, who is back in the US, often tells me how he misses Gujarat."

GMI has invested $162 million in its Halol facility. Vij committed further expansion of the facility at Halol, but refused to divulge details.

Though one of the most industrialised states in the country, Gujarat has been passing through a bad phase owing to recession, a sluggish state administration and lack of social and educational infrastructure.

Energy giant Enron, which was to lay a network of optical fiber cables alongside the Gujarat Electricity Board line for enabling direct-to-home access, pulled out in the second quarter of last year because of the state government's delay in taking certain crucial decisions.

It moved to Karnataka, where the government cleared the project, enabling the company to implement the scheme in just three months.

French tire manufacturer Michelin was to set up its plant in Gujarat's Panchmahals district with an initial investment of Rs 15 billion and had huge expansion plans.

But Michelin quit the state and set up shop in Tamil Nadu, saying Gujarat lacked proper social and educational environment.

Recently the Indian Oil Corporation informed the state government that it was no longer interested in setting up a 1,000 megawatt power plant at a cost of Rs 40 billion at Savli, near Vadodara.

An NRI-founded company, Syntel, some time ago shifted to Pune in Maharashtra its $40 million IT project, pleading the state lacked a cosmopolitan atmosphere and there was paucity of skilled manpower in Gujarat.

Indo-Asian News service

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