Nearly half of Toyota’s volumes are safe from factory lockout

Both of Toyota’s plants in India, at Bidadi, Karnataka, produce only half of whatever the company manages to sell from its dealerships. On November 24, Toyota Kirloskar Motor (TKM) announced a lockout for the second time at both of its plants. A section of the employees had been on strike and this has affected production.

Nearly half of Toyota’s volumes are safe as 50 percent of its production is outsourced to Suzuki Motor Corporation (SMC), the parent company of Maruti Suzuki India (MSIL).

Toyota Glanza and Toyota Urban Cruiser are manufactured at SMC’s Gujarat plant and MSIL’s Gurgaon, Haryana plant, respectively. As of October-end, both models accounted for nearly 50 percent of Toyota’s sales in India.

On November 24, Toyota Kirloskar Motor (TKM) introduced the facelifted Innova at Rs 16.26 lakh (ex-showroom). The launch came just a day after TKM Following the directions of the Government of Karnataka, the management at TKM had withdrawn the lockout, effective November 19, 2020. However, even after the withdrawal of the lockout by TKM, only few workmen reported to work as per their shift schedule while a majority of the striking workers’ union members continued with their strike.

Toyota’s single-largest selling model, Innova Crsyta, which accounts for 36 percent of its India sales, continues to be produced in limited numbers as per details shared by a company official.

The Yaris, Camry Hybrid and Fortuner are the other models are manufactured by Toyota in India. Vellfire, a premium multi-seater, is a fully imported model. These four models account for about 15 percent of TKM’s India sales.

“We would minimise any inconvenience to our customers via vehicles at dealerships and stock at factories. Also, there is some production still happening at the plant with limited manpower,” the official said.

Employee strike

“For the plant operations to run smoothly and effectively, a minimum workforce of 90 percent in each shift is required, and, in view of the current situation, it is not viable to carry on with manufacturing activity with such a small number of workmen reporting for work,” said a TKM spokesperson.

TKM alleged that post the withdrawal of lockout, around 400-500 union members were trying to barge into the plant’s premises forcibly every day at unscheduled hours.

“Such hostile activities have created a volatile situation around the factory premises and unsafe conditions for other employees of the company,” said the spokesperson.

“Moreover, a few members are also instigating the illegal strike and disrespecting other members who want to return to work or those who are already working and taking on the additional burden caused by the strike. They were also making derogatory and provocative speeches, defaming the company and its officials and threatening the officers of the company,” added the spokesperson.

On November 13, TKM suspended 39 members of the union, who, it alleges, were involved in acts of misconduct. They were placed under suspension, pending enquiry. The strike was triggered by the suspension of a union member. Toyota declared the strike as illegal.

Toyota’s appeal

Toyota’s plants have the capacity to produce 310,000 units a year, but were operating at 25 percent by the end of October. As per data shared by the Society of Indian Automobile Manufacturers (SIAM), TKM sales rose 4 percent in October 2020 to 12,373 units, while it fell 51 percent during April-October to 36,937 units. The fall was worse than the 26 percent fall recorded by the passenger vehicle segment during the same seven months.

“TKM would like to find a quick resolution to this ongoing situation through mutual trust and respect, and with thorough communication with the members. Unfortunately, the same isn’t being respected or reciprocated by some members who have been vitiating fundamentally expected behaviour required for seeking an end to this illegal strike. TKM intends to initiate necessary actions in accordance with the law”, the spokesperson added.