Toyota Kirloskar Motor Suspends Production at Karnataka Plants over Pay Dispute

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By greeshma m | March 17, 2014 11:15 PM EST

Toyota Kirloskar Motor (TKM), the Indian subsidiary of Japanese auto major Toyota, temporarily suspended production at the two manufacturing plants at Bidadi near Bangalore, effective from 16 March, after the breakdown of salary negotiations which were initiated last year.

REUTERS
Toyota Motor Corp's Indian unit has declared a lockout of its workers at two car plants after strained salary negotiations spurred workers to stop production lines.

According to TKM, the company has been holding talks with some of the workers to resort the issue for the past 10 months. However, over the past 25 days, some workers have resorted to deliberate stoppage of the production line, abuse and threatening of supervisors, and thus the company was left with no other option but to declare a lockout. The lockout would result in a production loss of 700 vehicles a day, the company revealed.

"The management and the union have been discussing the charter of demands for the period FY14 for the past 10 months. As a bipartite agreement was not reached, the Karnataka Labour Department has conducted seven tripartite meetings to reach a settlement. But the conciliation efforts have not yet resulted in an agreement, leading to the lockout," PTI quoted the company.

Toyota, the maker of Innova MPV, has two plants at Bidadi with a manufacturing capacity of 3,10,000 units per annum. The plant rolled out the first car in December 1999. The company produces Fortuner and Innova at the first plant, and other cars including the Etios and Corolla Altis at the second plant. Toyota Motor Corporation holds the majority stake of 89 percent in TKM, while the remaining 11 percent is held by the Kirloskar group.

Last year, TKM contributed 1.6 percent to Toyota's global sales. In February, TKM reported 19.27 percent decline in its total sales at 11,284 units. The company sold 13,979 units in the corresponding month of the previous year.

In 2012, India's leading carmaker Maruti Suzuki had declared a lock out at its Manesar plant for a month, following violence by workers.

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(Photo: REUTERS / FRANCOIS LENOIR/FILES)
Toyota Motor Corp's Indian unit has declared a lockout of its workers at two car plants after strained salary negotiations spurred workers to stop production lines.
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