LABOR UNREST AT TOYOTA INDIA

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The issue took a new turn when representatives from the management at TKM refused to attend a meeting before the Labor Commissioner on January 09, 2006 for resolving the dispute with the union. The company said that the atmosphere was not conductive for talks as the Employee Union was in a violent and agitated mood. Though, the company appealed for two weeks time to appear before the Labor Commissioner so that situation could become stable, they were given time only till January 12, 2006. The Employee Union got support from various trade unions and demanded the intervention of the state government to help resolve the dispute in their favor.

TKM continued with partial production of vehicles with the help of non-unionized workers and the management staff, who were specially trained for these kinds of emergencies. However, the company’s output had fallen from 92 vehicles per day to 30 vehicles with an estimated production loss of around INR 700 million. The Company lifted the lockout on January 21, 2006 stating that it was responding to the request from workers who eager to return to work. The workers were required to sign a good conduct undertaking to maintain discipline and ensure full production.

The Employee Union relented and withdrew their strike following a Government Order on January 21, 2006, which was against the strike and referred the issue to the third Additional Labor Court. However, the union said that they would not sign the good conduct declaration specified by TKM.

The unrest had other ramifications as the Toyota spokesperson said that the company would rethink its recent decision to build a second car manufacturing plant in the state. It was also felt that this incident would seriously affect the Karnataka Government’s efforts in trying to attract Volkswagen to establish a vehicle manufacturing plant in the state.

This was the second dispute involving a Japanese vehicle manufacturer and trade unions in India. Earlier in July 2005, workers of Honda Motor & Scooters India Limited had a violent clash with the police at Gurgaon, near New Delhi, resulting in a revenue loss of around INR 1.25 billion for the company. This recent rise in trade union activism resulting in violence and business loss has attracted the attention of the national and international media. With around US$ 2 billion equity investment since 1991, Japan was the fourth largest investor in India. During the Honda incident, the Japanese ambassador in India had stated that these kinds of incidents would show India in poor light.

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