Japanese automaker Toyota Motor decided to temporarily close two plants in India, where several employees had stopped production lines as a sign of protest.
Toyota Kirloskar Motor, Toyota’s Indian unit, said that in the last 25 days several workers have disrupted management and affected production lines, protesting for the delay in salary hikes. Negotiations between the labor union, management and local government for a salary increase have started 10 months ago and it seems that workers have begun to lose their patience.
Over the past few years, the labor unrest in India has erupted several times through violent manifestations. In 2012, the riot at Maruti Suzuki India has killed one man, injured 100 others and caused a production loss of $250 million.
“The company is left with no other option but to declare a lockout of the premises to ensure the safety of its workers and management personnel,” Toyota Kirloskar Motor said.
Toyota decided to close its factories near Bangalore on Sunday, March 16, and did not give any information on when the production will restart. Toyota Motor spokesman Naoki Sumino in Tokyo said that for each day of closure the company will lose 700 vehicles and that talks between the company and the labor union have already started to solve this issue.
In 2013 Toyota’s sales in India accounted for only 1.6% of the company’s global sales, with the automaker holding 4.5% of the Indian auto market. Toyota has manufactured in this region 174,000 vehicles last year and sold 147,000 of them.