IR Problems at Toyota Kirloskar Motor Private Limited

Industry analysts opined that the strike at TKM raised doubts about the success of the Japanese style of management in the Indian context. They also recalled the July 25, 2005 incident at the Gurgaon⁶ plant of Honda Motorcycle & Scooter India Private Limited (HMSI), a wholly-owned subsidiary of Honda Motor Company Limited (HMCL)⁷, when there were violent protests from workers, disrupting production at the plant (Refer to Exhibit I for the labor unrest at HMSI). These incidents served to underline the fact that it was essential to ensure sound industrial relations for the smooth continuation of operations and the safety of management, workers, and the plant of 

Commenting on the growing incidents of discord between management and workers, Surinder Kapur, Chairman of the Sona Group, an automotive component manufacturer, said, "This incident has brought to light the need to look at labor laws afresh. We cannot have archaic labor laws in a liberalized economy. Compare China and India not just on infrastructure but also on labor laws. It is much more liberal there (despite the Communist regime).⁸ Liberal labor laws are not about hire-and-fire at will but about more room for contract labor with a tenure of, say, three years or so, and more temporary workers. If there is a feeling that minimum wages are low, the government must work toward increasing them."⁹