Respect for People? Labor Unrest at Toyota Kirloskar

There has been labor unrest at the Toyota Kirloskar joint venture in Bidadi, India over the last week. Indian business news has covered these events, but there has been very little mention of it in American or Japanese news.
On January 8th, 2005 fear of physical harm to people and equipment caused Toyota Kirloskar Motor management to lock out workers who called a snap strike on January 6th. Production resumed at a reduced rate, due to management and office workers cross-trained in production processes.
The strike was called in protest to the firing of three employees.
The union called the lock out illegal and requested the government act against Toyota management. Toyota management failed to show up for a reconciliation meeting on January 9th, 2005 saying the atmosphere was highly emotional and not conducive to discussion. Toyota management cited physical violence on the part of the strikers, while the strikers protested the working conditions, low pay and poor treatment of workers.
With production volumes dropping while the two sides failed to meet for conciliation, there was talk by Toyota management of the effect this labor action will have on future investment decisions at this location by Toyota. Talks between the two sides are scheduled to resume under a government mediator, according to a Wall Street Journal article on January 11, 2005.
This type of labor-management conflict between factory workers and management in foreign-owned factories in India is not new. Labor unrest rattled Indian industry in 2005. As early as August 2005 this opinion piece by B. Gautam in The Japan Times finds a broader lesson in labor unrest at the Honda facility in Gurgaon, India:
It must be understood that Gurgaon is merely the tip of an iceberg. As much as India would like to compete with China economically, India’s labor force is culturally and politically very different from its counterpart across the Himalayas. Indians will not condone the kind of sweatshop economy that prevails in China.
As an important trading partner and source of FDI for India, Japan and its companies must understand that every country has its own social and cultural peculiarities, and these have to be taken into account while doing business.

This trouble in India is in stark contrast to Toyota’s success at transplanting TPS at sites such as TMMK and NUMMI. Toyota still has some things to learn about putting respect for people front and center in their drive to dominate automobile manufacturing through localized production.

1 Comment

  1. Dinesh Bist

    August 11, 2006 - 12:36 am

    Good Knowledgable articles