Toyota's India arm temporarily shuts down its units over labour problems
Toyota Motor Corp's unit in India has temporarily closed its two plants where some workers had stopped production lines to protest a delay in salary hike after 10 months of negotiations.
The factories near Bangalore are Toyota Motor's only vehicle plants in the world's sixth-biggest auto market, where the Japanese manufacturer generates just a sliver of global sales.
Their closure raises the spectre of labour unrest at Indian car plants in recent years, including a 2012 dispute at Suzuki Motor Corp unit. A riot left one person dead and over 100 injured, and resulted in a $250 million month-long production loss.
Toyota Kirloskar Motor (TKM), the world's biggest car maker's Indian unit, had stated that some workers over the past 25 days had disrupted business as the management, labour union and local government negotiated wages.
The subsidiary closed the factories on Sunday - a non-production day - and did not state when it will reopen them.
President of Employees Union, Prasan Kumar, said that Toyota locked out as it does not want to address the workers' grievances.
"We have been discussing about our charter of demands, include issues and safety concerns from several months, the discussion is going on. The issue is also pending in the labour department, before Labour Commissioner, Labour Secretary, the management to divert the issue and to create a fear cycle among the employees, the management has taken this stand of illegal lockout, so we are demanding, asking the management to lift the lockout immediately because it is the life of around 6000 employees," Kumar said.
Kumar claimed they have had several meetings in the past one-year, but the management is adamant about not addressing their issues.
He also mentioned this would affect the 15 other units in which 20,000 workers are employed.
Shares of Toyota Motor were down 0.1 percent in Tokyo, in line with the benchmark Nikkei index.
India accounted for just 1.6 percent of Toyota Motor's global sales last year. At that time, the Japanese manufacturer held 4.5 percent of the Indian market having made 174,000 vehicles and sold 147,000.
Subsidiary TKM has been building cars at one of the locked-out plants since 1997 including the Fortuner and Innova, and at the other since 2010 including Etios and Corolla Altis.
The lockout comes just a week after Toyota Motor gave Japanese workers their biggest pay increase in 21 years, and two months after the automaker said social unrest in Thailand could lead it to rethink investment.
(Posted on 19-03-2014)