Toyota Strike

Karnataka

2006

Toyota Motor Corporation - Japanese

automaker

Headquartered - Toyota, Aichi, Japan

333,498 employees [2013]

13th largest - revenue [March 2013]

2nd largest passenger automobile

manufacturer - production [2012]

Largest - overall production (including

commercial vehicles)

Largest listed company in Japan - market

capitalization & revenue [2013]

Chairman - Takeshi Uchiyamada & CEO – Akio

Toyoda

TMC – An Introduction

"Founded by Kiichiro Toyoda in 1937

as a spinoff from his

father's company Toyota Industries to

create automobiles"

Kiichiro Toyoda

Sakichi Toyoda

Sakichi Toyoda

Toyota Industries

Japan’s 1st Power loom

Toyota’s 1st Car

Toyota Motor Corporation

Kichiro Toyoda

Market Share – 40% [Japan]

Automobiles – passenger cars, luxury vehicles,

commercial vehicles, engines

Toyota - top rank - 9,909,440 units produced

globally [2012]

Services – banking, insurance, leasing

On May 8, 2013

• Net revenues - 22.0 trillion yen [US$ 216.7 billion]

• Operating income - 1.32 trillion yen [US$13 billion]

• Net income - 962.1 billion yen [US$9.47 billion]1 USD =

102.31 JPY1 INR = 1.63

JPY

Japan25%

Oceania3%

Asia11%

Middle East7%Africa

4%

Europe14%

Latin America

4%

North America

32%

Toyota Sales By region

Source – www. toyota.com

Toyota Motor Corporation produces

vehicles under 5 brands –

Toyota

Hino

Lexus

Ranz

Scion

Toyota Kirloskar Motor Private Limited

Joint Venture – TMC [99%] & Kirloskar Group [1%]

4th largest car maker - Maruti Suzuki, Hyundai, and

Mahindra

Manufacturing unit – Bangalore, Karnataka

Investment of INR 7 billion in October 1997

Initially, held equal shares, then 79:21 & to 99:1

Current plant - Bidadi, Karnataka - 432 acres - 80,000

v.p.a.

2nd plant - outskirts of Bangalore, Karnataka - 70,000

v.p.a.

More than 249 dealerships in 144 cities across

28 states and union territories

TKML – An Introduction

State Govt. Granted Scores Of

Incentives

Entry Tax

Pollution Control

Land Acquisition

Power & Water Supplies

Karn

at

aka

Outskirts of Bangalore

Toyota Plant

Maruti Suzuki46%

Hyundai16%

Mahindra &

Mahindra12%

Toyota6%

Tata Motors

6%

Honda4%

Chevrolet4%

Renault3%

Volkswagen3%

Car Sales by Units - 2013

Source – www. mbaskool.com

Toyota In India Corolla [2003]

Innova [2005]

Etios [2010]

Fortuner [2009]

Camry [2002]

Qualis [1999 – 2005]

Land Cruiser [2009]

Background of Workforce

3 categories of employees in TKML

Managerial staff - higher management officials - MD

Senior staff to supervisors & general workers

3rd group - contract laborers – specific tasks

And group - general workers on the main line

• Team member trainees

• Probationary and team members

Young Workforce - the ages ranging from 21 to 29

years

Discourages women employees on main line

production/assembly

Workers on the main line are technically trained

Majority of workers - Bangalore city or neighboring

districts

Case Abstract

Examines industrial relation problems at Toyota Kirloskar

Motor Private Limited

Reasons - led to the dispute between the management & the

employees

Elaborates incidents - led to the strike &

lockout

Influence of external parties - trade unions & the government

What the case is about ?

TKM had a history of

disturbed relations between

the management and the

workers

Prior to the strike and lockout

in January 2006, the plant had

experienced three other strikes

–

two in 2001, and a strike and a

lockout in 2002 [lasted for

almost two months]

1st - April

2001 2

days

2nd - June

same

year

In 2002 - two

shifts to meet

the increased

demand

2001

Nominal increase made employees upset &

they boycotted lunch for one day as a protest,

management ordered and pushed the workers

outside the factory

Management announced Rs. 300 nominal wage hike

Dharna started by workers

TLM announced establishment of a Team Member Association (TMA) – 15

members elected

TMA committee member Mr. Renka

Prasad terminated on the charge of

non-performance

TMA elected committee members; decided to register it as a trade

union

TMA is only for work ware issue, canteen issue, or safety issue; refused

to discuss termination

Employees provoked and immediately

went for strike

Job security

Taking back retrenched 3 employees

To reduce the training period from 3

to 1 year

Strike continued for 12 days

2002

Union gave strike notice2 union officials - General Secretary Mr.

Shiv Kumar B & Joint Secretary Mr. Raghu R terminated

Strike - 52 days – take back union leaders

TKM demanded two shifts to meet the increased demand

1st shift - 8 AM to 4 PM & OT - 4 PM to 8 PM

Settlement - Rs 2,500 increase of wage after negotiation

Karnataka government declared Toyota as an essential service

Strike was banned with this order and workers returned to work

2006

On January 08,

2006, TKML

announced an

indefinite lockout

of its vehicle

manufacturing

plant at Bidadi

located near

Bangalore,

Karnataka

Reason - strike,

which had entered

its 3rd day, by the

Toyota Kirloskar

Motor Employees

Union

Lockout notice

stated - strike was

illegal as the

Employee Union

did not give the

mandatory 14

day notice period

as per Industrial

Disputes Act,

1947

Also - workers were

indulging in

violence and

destruction

Total workforce of

2,378 out of which

around 1,550

employees belonged

to the Employee

Union

On January 06,

2006, the EU went on

strike with the

demand - reinstate

3 dismissed

employees, 10

suspended

employees, &

improve the work

conditions at the

plant

Employees -

dismissed &

suspended -

attacking a

supervisor &

misconduct

TKM declared – not

to rehire or

reinstate those

employees

culminating in the

strike and lockout

Workers were

threatening to blowup

LPG gas cylinders

Obstructing the

outward movement of

manufactured vehicles

Illegally stopping

production

Manhandling non

EU workers

Active in trade

union activities

Suppress the trade

union

Working

conditions -

inhuman and 'slave

like'

Insufficient

relaxation and

compensation

TKM

TKMEU

January 09, 2006 -

TKM refused meeting

before the Labor

Commissioner - 2

weeks time

EU got support from

various trade unions -

AITUC, CITU

Demanded the

intervention of the

state government

Continued partial

production of

vehicles - non-

unionized

workers &

management staff

- trained for such

emergencies

Output fallen from

92 to 30 vehicles

per day

Production loss of

around INR 700

million

Lifted lockout -

January 21, 2006

Request from workers

eager to return to

work

Workers were required

to sign a good

conduct undertaking

to maintain discipline

and ensure full

production

EU relented &

withdrew their

strike -

Government

Order on January

21, 2006

Referred the issue

– 3rd Additional

Labor Court

Refused to sign

initially - good

conduct

declaration

Worker’s Demands

• Good Working Conditions

• Wage Revision & Increment

• Period of Traineeship

• Abolition of Contract Labor

System

• Reinstatement of Suspended

Workers

TKM won the match ?

TKM's management never reinstated the

dismissed workers

TKM did not face any major problems due

to the strike of the

workers and the lockout at its plant

TKM had made appropriate arrangements

to meet the

market demand for its cars

Much of the worker’s demands were

suppressed

OR

Were the worker’s right in

fighting for their

demands ? Were the demands

justified ?

Was the management right in

suppressing the union ?

Bibliographyhttp://www.hindu.com/

http://www.icmrindia.org/

http://www.iasir.net/

http://www.toyota.com/

http://www.toyotabharat.com/

http://www.mbaskool.com/

Thank

you !

Any

Queries ?