Toyota Kirloskar Motor Private Limited (TKM) was a joint venture, established in 1997, between Toyota Motor Corporation (Toyota), Japan’s largest car company and the second-largest car manufacturer in the world, and the Kirloskar Group of India. Toyota holds an 89% equity stake and while the Kirloskar Group holds the remaining 11%. Toyota has over 400 acres of land in its Bidadi plant and less than half of the land has been utilised so far even though its plant's capacity is about 60,000 units per annum. Toyota has invested nearly 15 billion INR in the plant. Some of its most famous brands such as Camry, Innova and Corolla are the end products of this plant. The plant had a total workforce of 2,378 out of which around 1,550 employees belonged to the Employee Union. Toyota's plant has witnessed labour unrest in 2001 and again in 2002 hitting the production of their vehicles leading to a ban of the strike by the Government. Below, we discuss the various reasons, which led to the clashes between the management and the employees of TKM. This highlights the growing number of instances of clashes between the employees and the management of companies in India, which is often guided by external parties such as trade unions and political parties.
• The importance of HR policies adopted by the organization to prevent labor unrest at the workplace. • The role of trade unions, political parties etc in upsetting the work culture in a company. The Issue:
On January 08, 2006, Toyota Kirloskar Motor Private Limited (TKM) announced an indefinite lockout of its vehicle manufacturing plant at Bidadi located near Bangalore, Karnataka. The company claimed to have forced to resort to such a decision following a continuous strike by their employee union for third day in a row. The Toyota-Kirloskar union affiliated to the Center of Trade Union (CITU) Jan 9, 2006 demanded that the Government prosecute the management, which had declared an indefinite lockout of the local unit for violating a section of the Industrial dispute act .On January 06, 2006, the Employee Union went on strike with the demand to reinstate three dismissed employees, ten suspended employees, and improve the work condition at the plant. According to company sources, these employees were dismissed and suspended based on disciplinary issues. TKM declared that it would not rehire those employees culminating in the strike and lockout. The company said that the striking workers were threatening to blowup LPG gas cylinders in the company premises, obstructing the outward movement of manufactured vehicles, illegally stopping production, and manhandling other workers, who were not part of the Employee Union, to strike. The Employee Union said that these employees were dismissed because they were active members of the trade union and the company was unhappy with the union activities. They further added that the working environment at the plant was not conducive and the work hours were longer than the standard. The issue scaled further in the event of the Company representatives failing to appear before the Labor Commissioner on January 09, 2006 for dispute resolution with the union. The company reasoned that they feared adverse reactions from the aggressive union members. 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 with the back up of CITU and other unions 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. Irrespective of this, the company incurred huge production losses due to reduction in output...