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Toyota halts India production over wage dispute

Tuesday, 18 March 2014 - 7:17am IST | Agency: dna

The lockout comes just a week after Toyota gave Japanese workers their biggest pay increase in 21 years

The deadlock over pay hike in Toyota's Bidadi plant continues and it's not clear when the plant will be reopened. 

The company had declared a lockout on Sunday and employees are now demanding government intervention.

On Monday, there were about 200 policemen manning the facility at Bidadi, about 30 km from Bangalore. The employees' union was planning to meet the Karnataka chief minister. The impasse has reached its tenth month now. "We have demanded a hike of Rs 4,000 per month for Grade 8 employees. However, the management is ready to give only Rs 3,050, which is not acceptable," Prasanna Chakkeri, president, Toyota Kirloskar Motors Employees' Union, said. 

There are about 6,000 Grade 8 employees at the plant. Initially, they had demanded a hike of Rs 8,000 per month. After negotiations, they brought it down to Rs 4,000. The union also claims that Toyota had violated many labour laws. For instance, the number of contract employees outnumber permanent employees, which is a "threat to those who have been working there for years now".  "According to labour laws, permanent employees should be more than temporary ones," says Gangadhar MN, one of the protesting employees.

There are about 6,000 permanent employees in the company, compared with 14,000 contract labourers. 

So far, about 48 meetings have been held between the labour union and management over the wage hike. "They keep saying the same stuff. How long can you keep meeting them for talks? If nothing materialises, I guess we have to give in, considering we have to feed our families as well," said one of the employees.

India accounted for just 1.6% of Toyota's global sales last year. TKM has been assembling cars like the Fortuner and Innova at Bidadi since 1997, and the Toyota Etios and Corolla Altis since 2010.
The lockout comes just a week after Toyota gave Japanese workers their biggest pay increase in 21 years. 

According to Shekar Viswanathan, vice chairman & whole-time director, TKM, the lockout decision had to be taken in view of the threat to life on employees. "The union's demand is sky-high. We have explained we cannot increase wages beyond a certain limit," says Viswanathan. 

The two plants in Bidadi have an annual capacity of 310,000 units per year. "We have a workforce strength geared up to produce 310,000 units per year and we have not laid off a single employee. So we have to mute our wage increases." 

Additional labour commissioner Chikkalappa said the employees union and the government will try to resolve the dispute through negotiations. "If it doesn't work out, the government will take suitable action," he said.

Meanwhile though the lockout continues, Grade 7 employees will be reporting to work from Tuesday.

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