Toyota Kirloskar Motors (TKM) has declared a lockout at both of its plants at Bidadi near Bangalore, with effect from 16th March 2014. The decision for the lockout comes after talks between the management and the labour union failed to come to terms over wage negotiations. The production at both the plants has been disrupted since the past 25 days due to the unrest. Maruti Suzuki had a similar fallout with the labour union back in 2012 at the Manesar plant, which got ugly soon after.
The labour union have been discussing the charter of demands for the financial year 2014 with the management for the past 10 months. Since talks could not lead to an agreement, Toyota decided to declare the lockout. The statement from Toyota also says that certain sections of its employees under the instigation of the union have resorted to deliberate stoppages of the production line, abuse and threatening supervisors.
With the current scenario, the lockout was put in effect to ensure the safety of the workers and management personnel at the plant. Established in 1997, Toyota’s first plant started producing cars in India since December 1999. The Bidadi plants employs over 6400 people and has an installed capacity of 3,10,000 units per annum. Both the plants are spread across a vast area of 432 acres. The plant will not start production until both the parties come to terms and work can begin peacefully.
Toyota has losses mounting everyday, while also losing out on the production capacity for the year. The company has had a loss of over 2000 cars that were not produced in the past 25 days and the number keeps rising for every day the production is halted. The employees union on the other hand are seeking state government’s intervention to sought out the issue. The workers are seeking a wage hike of Rs. 4000/- at the main level as against Rs. 3050/- proposed by the management. In 2012, Suzuki’s fall out at its plant had led to losses of over $250 million coupled with riots, destruction of property and the death of a management personnel.
Toyota’s first plant with a capacity of 1 lakh units produces the Fortuner and the Innova MPV, while the second plant with a capacity of 2.10 lakh units manufactures the flagship sedan Camry, Corolla Altis, Etios twins and also the Camry Hybrid. Premium models like the Land Cruiser, Land Cruiser Prado and Prius Hybrid are imported as CBUs. The company however, produced only 1.1 lakh cars last year due to the overall slowdown in the automotive market, coupled with the Etios twins remaining flop models.