American automaker Ford has announced its plans to sign a Memorandum of Understanding (MoU) with the Tamil Nadu government on 31 October to construct a new engine manufacturing line at its Chennai facility, which is estimated to create over 600 jobs.

The MoU will be signed in the presence of Minister for Industries TRB Rajaa, following a meeting with Ford executives and Chief Minister MK Stalin at 11 am.

As part of the arrangement, Ford has announced plans to produce new powertrain engines with innovative technologies. The corporation would invest Rs 3,250 crore in the project, which aims to increase industrial growth and jobs in the state.

The proposed facility will have a planned capacity of 2,35,000 engines per year, with manufacturing beginning in 2029. Site preparation for the project is planned to begin later this year.

This development comes after a letter of intent signed in September 2024, during CM Stalin’s visit to the United States. Ford’s renewed connection with Tamil Nadu comes after the company stopped manufacturing vehicles in India in 2022.

The new Chennai engine facility will be part of Ford’s global powertrain network, supporting the company’s advanced manufacturing and export strategies. The facility, located in Maraimalai Nagar on the outskirts of Tamil Nadu’s capital, has been closed since 2022.

While there was considerable discussion of resuming production at the factory, many believed that US President Donald Trump’s new tariff policies would change the game.

The decision comes as Trump continues to promote his ‘Made in America’ manufacturing program, with an emphasis on the auto industry. He once chastised Ford for expanding overseas, but he later praised the company for making significant investments in its US operations.

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