Focus on catching up with production, wage negotiations on: Toyota

Written by Ajay Sukumaran | Bangalore | Updated: Mar 22 2014, 11:05am hrs
Toyota Kirloskar Motor (TKM) on Friday said it is focusing on catching up with production and maintaining supply to dealers as it gets set to lift a week-long lockout at its two plants near Bangalore, even though wage negotiations with its employees' union are not yet settled.

The Japanese carmaker, which makes roughly 570 cars a day, will resume production on Monday.

The only issues that we have in mind is the question of discipline on the shop floor. I do believe that after this one week, discipline will return and we should be able to get on with business, Shekar Viswanathan, vice-chairman, TKM, told FE.

The carmaker has said it typically maintains low inventory levels, stocking for a maximum of three days. Besides, it says it also lost around 2,000 units of planned production owing to disruptions by workers in the 25 days leading up to the March-16 lockout.

Asked about the situation on the dealer front and how the company would catch up on the lost production, Viswanathan said: Clearly, the production planning department is in the know. They will therefore be ordering the engines and other parts as required. Based on market demand, we will calibrate our production as we always do.

The country's fifth largest automaker has a combined annual production capacity of 3.10 lakh units at its two plants in Bidadi, 35 km from Bangalore.

Toyota had declared a lockout at its plants last Sunday on the grounds that some employees were disrupting production after protracted wage negotiations between the management and employees' union proved inconclusive.

The company has suspended some employees for serious misconduct and an inquiry is going on.

We have made our final offer to the union, giving them the choice to accept it and sign. It is already pending with the government. If they don't want to sign it, the government has to take a decision on the matter, said Viswanathan.

TKM, which last witnessed labour problems in 2006, has said wage negotiations had been settled successfully in the eight years since.

The union has been rigid on its demands. Also, this is a year of recession. Clearly, volumes have suffered. I do hope the union realises that when volumes suffer, profitability suffers and all in all there is no case for paying the same amount as in previous years.

The company's domestic sales in the 11 months of the fiscal starting April 2013 have declined 17.42% to 1.2 lakh vehicles against the year-ago period, according to data from the Society of Indian Automobile Manufacturers.

The TKM employees' union has been demanding an increment of R4,000, which is on a par with the raise given last fiscal, but the management has offered R3,050, citing a challenging business environment.