Toyota Suspends Production in India as Dispute Continues

Toyota Motor Corp’s India unit temporarily closed two plants that have had production lines stopped by some workers to protest delay’s in increases in salary after negotiations have lasted more than 10 months.

The two factories located near Bangalore are the only vehicle plants for Toyota in the sixth largest automobile market in the world, where manufacturers in Japan generate only a sliver of sales.

The closure of the plants raises the issue of labor unrest at car plants in India over recent years, including a dispute in 2012 at the Suzuki Motor Corp unit. A riot there killed one person and left more than 100 injured. It also resulted in a $250 million production loss for a month.

Toyota’s Indian unit, Toyota Kirloskar Motor in a prepared statement said there had been some workers over the last 25 days that disrupted business as the labor union, local government and management negotiated new wages.

The statement said the company did not have any other option but to declare there is a lockout to ensure its workers safety and that of the management personnel.

On Sunday, the subsidiary closed its two factories. Sunday is a non-production day and there is not date as to when it will reopen the plants.

A spokesperson from Toyota said a production loss daily of more than 700 vehicles could take place.

The union and TKM will keep holding negotiations to resolve the problems.

Toyota shares fell by 0.1% in Tokyo on Monday afternoon.

India only accounted for about 1.6% of the global sales for Toyota in 2013. At that time, the manufacturer held a market share in Indian of 4.5% with 174,000 vehicles made and 147,000 sold.

TKM the subsidiary has been manufacturing cars at one of the plants locked out since 1997 including Innova as well as Forutner.

This lockout comes only a week after Toyota gave workers in Japan their biggest increase in more than 21 years.

This comes only a week after Toyota gave a pay increase for international duties.