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APRIL 26, 2014 vol xlIX no 17 EPW Economic & Political Weekly18

Lockout at Toyota-KirloskarThe Future Space for Labour

Sobin George

The author thanks Shrinidhi Adiga, Prasanna Kumar, Meenakshi Sundaram and Anatha Nayak for their support.

Sobin George (sobing@gmail.com) is with the Centre for the Study of Social Change and Development, Institute for Social and Economic Change, Bangalore.

The lockout at Toyota-Kirloskar Motors in Karnataka was a strategy by the management to silence the workers who put forth their demands and raised fears about their job security. Such actions challenge the ability of unions to negotiate workers’ demands. The Toyota case is a possible trajectory of weakening trade union mobilisations.

The Indian industrial landscape is rearranged in such a way that we do not hear reports of labour

resistance as often as two decades ago. Trade and industrial policy reforms, espe-cially deregulation and making labour laws fl exible have disciplined labour. Recent disputes in Maruti automobiles at its Manesar unit in Haryana and the ongoing (at the time of writing) one in Toyota-Kirloskar Motors Ltd (TKML) at Bidadi, near Bangalore, must be seen as two exceptions where workers’ organi-sations have stood up against the man-agement to voice their demands.

The Toyota Kirloskar Motors Employees Trade Union (TKMEU) submitted a charter of demands for 2014-15 by July 2013 since the year’s agreement was to expire on 31 March 2014. Annual wage incre-ments are agreed upon by the manage-ment and union as part of such negotia-tions, which take place every year before the expiry of the previous year’s agree-ments. The current dispute and lockout at TKML, at fi rst sight, appears to be over conventional issues of salary incre-ments, better conditions of work and against contractualisation. However, these issues emanate from much larger issues pertaining to the organisation of production. The recent developments, hence, throw up some new issues, in-cluding about production practices and ways in which such practices govern labour relations and weaken workers’ agency; creation of a public image of workers’ struggle and resistance as a “violent, anti-industry, and anti-growth” move and more importantly about the future of the legitimate space of labour.

Labour Resistance at TKML

It is important to highlight the context of the lockout before addressing the larger questions. There has never been a smooth relationship between workers and the management of TKML since its

establishment at Bidadi in 1997 (George 2006). The history of the present dispute can be traced back to the long struggles of workers, which started in 2001 when the company refused the workers’ de-mand for a salary increment and then suspended and even dismissed some workers. This led to the formation of the TKMEU in July 2001. The union thereafter took up various issues pertaining to the suspension of workers, wage revision, shift and leave allowances, etc, though set-tling some of these took years of struggle both within and outside the factory.

The present dispute also started fol-lowing the rejection of a charter of de-mands submitted by the union as part of the yearly negotiations with the man-agement and the developments that took place thereafter. The major de-mands of the union included an increase of the monthly wage by Rs 8,000 be-cause of the rising cost of living. The u nion also demanded a rationalising of cycle time, a fi ve-day working week, housing facility/allowance and removal of contract employment in production. (Cycle time is a ratio of daily operating time to the required quantity of produc-tion per day. It is used in the Toyota Pro-duction System (TPS) to decide the num-ber of workers needed in a group to u ndertake a particular task. What is more important here is the emphasis in TPS to perform the required task with a minimum number of workers.)

The management did not respond to any of the demands positively except ini-tially offering a salary hike of Rs 2,400 which was increased to Rs 3,050 follow-ing a series of meetings with the union. The reasons that the management gave for the inability to meet workers’ de-mands were, “decline of sales and loss due to depreciation of the rupee against dollar on import of auto components”.1 The union rejected the offer since it was less than half of what they demanded and even less than the previous year’s increment, which had been Rs 4,000.2 The management also refused to change the existing cycle time, which workers argue is irrational and the main cause for high workload and stress. Since the bipartite meetings failed several times, the union started protesting initially in

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the form of dharnas and later on through token one-day strikes that were held on 10 and 28 February 2014.

Tripartite meetings with the labour department also did not lead to settle-ment of any of the issues in the charter of demands and this eventually led to the declaration of a lockout on 16 March 2014. The lockout changed the nature of the entire negotiation process as it di-verted attention from workers’ demands to the question of employment security. The management said that the lockout was “a precautionary measure to ensure safety of machinery, employees and management personnel”. However, the union notes there was no unrest of such a nature and the lockout was declared “to create fear among the workers and silence our legitimate demands”.3 The union also considers the decision illegal as the management did not follow the mandatory procedure of giving a 14-day notice to employees and the state labour offi ce before imposing a lockout.

Subsequent to the lockout, the man-agement continued disciplinary action against protesting workers and suspended 30 workers on charges of “indiscipline and misconduct”. Tripartite meetings and discussions with the state labour minister on 18 March also failed. On 20 March, the management agreed to lift the lock-out provided workers gave individual, signed undertakings, which comprised a new set of disciplinary rules in addition to the existing rules and regulation of the company. The union, however, rejected this proposal and took a position that the lockout must be lifted unconditionally. The union announced a relay hunger strike from 2 April 2014 until the manage-ment withdrew suspensions and lifted the lockout without demanding “good conduct” undertakings from workers. The crisis affects as many as 8,200 workers including 4,200 regular workers of TKML and another 4,000 workers in the sup-plying fi rms. During the second week of April the impasse between the union and the management was continuing.

Let us now come to the larger questions. As noted in the beginning, the lockout at TKML is to be seen beyond issues of wages and conditions of work. It is a story of the processes through which the

employer manipulates and disciplines the legitimate space of labour to its in-terest with its unique systems of produc-tion organisation and labour manage-ment strategies.

Labour Relations: The Toyota Way

Ever since the time of Henry Ford and Fordism (his famous theory of central-ised production), automobile companies have played crucial roles in defi ning in-dustrial and labour relations. Broadly speaking, the combination of Fordism and the theory of “scientifi c manage-ment” of Taylorism were central to the production processes of several big fi rms across the world.

The TPS, perhaps the most notable production system after the Fordist pro-duction organisation, is based on the philosophy of fl exible production and specialisation that focuses on lowering of production cost, decentralisation of production and division of work into core and periphery.

TPS also emphasises values such as effi ciency, which the company articulates by the expression “just in time” – to achieve a higher level of quality and pro-duction with the use of fewer resources including manpower. It is interesting to note how this system of production organi-sation also disciplines labour, subverts the agency of workers and intensifi es work. As Fumio (2006) notes, factors such as strin-gent managerial control and the deploy-ment of contract workers are essential prerequisites for the success of TPS.

Following Toyota’s global strategy, production jobs at TKML are divided into core and periphery layers along with the fragmentation of a single job into sepa-rate activities which is organised in a group, with production performed both inside and outside the mother plant. TPS also envisages the use of a reserve work-force that is employed purely on a con-tract basis in order to meet additional requirements of production and contin-gencies such as the present one.

For instance, as reported by the union leaders, though the fi rm announced the lockout it has been able to manage pro-duction to meet market requirements with its use of contract employees and trainees. However, such practices dilute

the negotiations of workers for their rights and force them to take a rather submissive position in order to protect their jobs.

Another important aspect of TPS is the element of labour control that is inher-ent in its production system. The control is so intense that it takes every single movement of workers into account and categorises these movements as those which “produces added value, produces no added value but necessary and produces no added value and unnecessary”.4 There are supervisors in every work group to monitor and regulate the movements of workers. These “value-added/subtracted movements” of workers also constitute an indicator in their performance ap-praisal by their supervisor. The lower performance points could lead to puni-tive actions like reduction of a salary and even to termination of jobs on the grounds of “non-performance”.

Similarly, even simple gestures of disagreement with the supervisor would be considered acts of “misconduct” or “threatening” in the language of the management and used against the workers. For instance, misconduct and threats were the grounds for suspension of union members as during the present dispute.5

Completion of a particular piece of work under the TPS is determined by production demand without taking into consideration the availability of work-ers, so as to minimise the cost of produc-tion. Studies conducted in Toyota units in India and other parts of the world also showed that TPS is the major cause of health concerns for workers (George 2006). The workers at TKML interpret the unique system of Toyota production to be “less hands, more work and less pay”. One of the workers puts across his experience with TPS in simple language:

….assume that at fi rst ten members were as-signed a job, they decrease the team strength to nine after one or two months. But they don’t compromise with the work load. They pressurise us to complete that work within the deadline. With huge diffi culty we com-plete that work. Next time, the company again decreases the team strength from nine to eight and pressurises us to work hard. …same work, same deadline but with less workers in the team….6

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When the demand is high, it is met with either increasing the work or reducing the number of members in a work group – both would result in over-work. It is worth noting that one of the major demands of the union was to rationalise the cycle time of production, which workers consider exploitative and stressful.

False Imagery: Labour Militancy

Another important concern are the im-ages created about a legitimate negotia-tion as being militant, anti-industry and anti-growth in the public sphere. For in-stance, the Toyota group, Tokyo, made a public statement that “production in its Indian assembly units was suspended due to threats against the manage-ment.”7 Also, the company stated in the lockout notice that “…to ensure safety of workers and management personnel, company decided to announce the lock-out”. Such reports created a public im-age that there was serious labour unrest at TKML, which led to the lockout. How-ever, till 16 March, when the lockout was declared, there were no cases reported of the management being threatened and properties being damaged. Workers also did not stage any violent forms of protest other than a dharna and two token strikes subsequent to the failure of their year-long negotiations over the charter of demands.

Furthermore, the union and workers also noted that they never wanted to stop production as it would also lead to loss of pay and employment.8 Workers therefore argue that the lockout was nothing but a strategy by the manage-ment to restrain workers from putting forward their charter of demands. As the president of the union, Prasanna K umar, notes:

…once the company announces a lockout, lifting of lock out will be the fi rst priority of the employees. Their plan became success-ful. Now out of desperation we are demand-ing a lifting of the lockout. The company said, yes, we are ready to lift the lockout but you should sign for our undertaking of good conduct… Our hunger strike now is for the unconditional lifting of the lockout and the immediate reinstatement of suspended workers...Our charter of demands still remains unresolved.

The undertaking that the manage-ment asked the workers to sign in order to lift the lockout also appears to be an attempt to project workers as militant and not adhering to rules and regula-tions. For instance, the undertaking states that the worker will (a) maintain absolute peace on resumption of work, (b) abide by the rules and regulation of the company as laid down under the cer-tifi ed standing orders of the company, (c) participate in kaizen (part of TPS) and in workplace improvement, (d) do allotted work for full hours of duty as per the working hours, (e) not be absent from workplace during duty hours, (f) not to use mobile phones inside the factory, and (g) not interfere with man-agement’s legal rights to take measures to protect its property.

Such an undertaking by workers would not only squeeze the existing space of workers for legitimate protest and negotiation, but create fear that would silence and discipline them fur-ther. The management could make this strategy work to an extent and at the time of writing (7 April) about 40 work-ers had signed the undertaking and re-joined work out of fear of losing their jobs. It was also reported by the workers that the management spread news about relocating the plants to Tamil Nadu if the dispute continued.

Conclusions

What is worrying here is the already narrow labour space, which appears to be further diminishing. The ways in which the demands of the workers are silenced as in TKML are indicative of the diminishing of labour space even for unionised workers. The crisis has reached such a juncture that the union had to deviate from its original focus on their charter of demands. This carefully

orchestrated overpowering of the union by the management points to several issues in the future for workers. These include the complete takeover of labour space by the organs of management, questions about the capability of a union in representing workers’ concerns in the present nature of organisation of work and above all the entire question of workers’ confi dence in labour unions. Another possibility is the emergence of newer forms of workers’ collectives in the long run, which is divided across hierarchies within the workplace, where the management plays a key role like the Team Member Associations that the TKML management had constituted for workers before the formation of the union. Whether the unions will be able to overcome such challenges of a “new” production organisation would decide the extent and nature of the space for labour in the future.

Notes

1 As reported by Shekar Viswanathan, vice chair-man Toyota-Kirloskar Motors, India, retrieved from http://www.newindianexpress.com/business/news/Lockout-Halts-Toyota-Car-Pro-duction-in-India/2014/03/17/article2114633.ece#.UzLcZiS6bIU

2 Interview with Meenakshi Sundaram, leader, CITU, Karnataka, conducted on 18 March 2014.

3 Interview with Prasanna Kumar, president of TKMEU, 21 March 2014.

4 Interview with a TKML worker, 21 March 2014, also see Fumio (2006) for more details on TPS

5 Interview with Prasanna Kumar, 21 March 2014.6 Interview with a TKML worker, 21 March 20147 For details, see, http://www.japantoday.com/

category/business/view/toyota-suspends-indi-an-auto-production-due-to-labor-unrest

8 Interview with Prasanna Kumar, 21 March 2014.

References

Fumio, Kaneko (2006): “Toyota and Asia Automo-bile Workers” in Labour in Globalising Asian Corporations: A Portrait of Struggle, Asian TNC Monitoring Network Series, AMRC, Hong Kong, pp 181-214.

George, Sobin (2006): “Workers’ Struggle in Toyota Kirloskar Motors, India: Changing Capital Labour Relations in Trans National Corporations”, Labour File, 4(1): 34-37.

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