Toyota Kirloskar Motor (TKM) has floated a voluntary retirement scheme (VRS) for its permanent employees following a year-long slowdown in vehicle sales, leading to minimum production at its plants. Toyota is the third company in the last two months to come out with a VRS after Ashok Leyland and Hero MotoCorp.
The scheme, which is for workers at the Bidadi plant in Karnataka with over five years of experience, was laid out on September 23 and would run up to October 22, 2019. As car sales have been sluggish for the past one year, manufacturers have been cutting production since January 2019 to keep the channel inventory under control. As a result, temporary workers at several plants have been asked to leave.
In the April-August period, Toyota’s production was down 27% year-on-year while sales fell by 19.5% y-o-y.
When contacted, a company spokesperson said this is purely a voluntary scheme and has no relation to TKM’s business situation. “Employees opting to apply to the scheme will receive a compensation package in addition to normal retirement benefits.
“The scheme has been launched in order to support the employees to ensure career change with financial security and to achieve their aspirational goals or desired career by separating from the organisation,” the spokesperson said.
While Ashok Leyland had floated a VRS in August following a series of production cuts, two-wheeler maker Hero MotoCorp followed the similar route in September.
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