Toyota Kirloskar declares lockout at Bidadi plant due to labour strife

Toyota Kirloskar Motor (TKM), the Indian subsidiary of Japanese auto major Toyota, has declared a lockout at its manufacturing facility in Bidadi industrial estate near Bangalore with effect from Sunday, March 16. The company’s lock-out decision comes after the failure of talks between the management and the workers union over wage negotiation followed by labour unrest in the factory premises.

According to TKM, the management and the union have been discussing the charter of demands for fiscal year 2013-14 for the past 10 months. As a bipartite agreement was not reached, the Labour Department of the Karnataka government conducted seven tripartite meetings  to reach a settlement but these have not yet resulted in an agreement.

The company claims that a certain section of employees have resorted to deliberate stoppages of the production line, abuse and threatening of supervisors, thereby continuously disrupting business for the past 25 days. All these activities have been detailed in the lockout notice. As a result, TKM says it was left with no other option but to declare a lockout to ensure the safety of its workers and management personnel.

When contacted by Autocar Professional, the company’s spokesperson declined to comment on the inventory and possible effects of lockout on sales.

Toyota, which has market leadership in the MPV segment with its Innova, has two manufacturing units at its integrated factory complex in Bidadi industrial estate with a combined annual production capacity of 310,000 units.

It is learnt that the TKM plant in Bidadi manufactures around 750 to 800 vehicles every day spanning six models including the Innova, Fortuner, Corolla, Etios, and Camry. The company employs more than 6,400 employees at its factory spread on 432 acres on the outskirts of Bangalore.

According to sources, the workers had also resorted to a token strike twice on February 10 and February 28, showing the severity of the issue.

Toyota Motor Corporation holds the majority stake of 89 percent in TKM while the remaining 11 percent is  held by the Kirloskar group. TKM's Bidadi plant has seen labour strife before. Earlier in January 2006, the carmaker had declared a 15-day lockout following a worker strike related to wage negotiations.

Industry experts says that the current lockout at the TKM plant may affect proposed Japanese investments in Karnataka. In 2013, Honda opened its two-wheeler plant in Narasapur industrial estate, near Bangalore, which has evoked a good response among other Japanese investors, particularly from the auto component sector.

As per Japan External Trade Organisation (JETRO) estimates, at present, Bangalore has around 230 Japanese companies, a majority of them catering to the auto industry. Around 50 companies were added in the past two years and on an average, the number of Japanese companies is increasing at above 20 percent every year.