The Hindu Business Line : Toyota Kirloskar to revise wages every year

Toyota Kirloskar has decided not to follow the wage policy of its two other Japanese counterparts and will continue to revise wages of its workers every year.

An official with the company told Business Line that the wages are linked with productivity and hence it is not seen as a major drain on the company's finances. In November this year, the Japanese car manufacturer increased the wages 16 per cent over last year for its 1,800-odd workforce.

In comparison, Maruti Suzuki raises wages every five years. The period of the current wage agreement runs till 2008 while the hike is for 10 per cent for a total of 3,000 workers. Honda Siel Cars, the third Japanese auto company, revises its wages every three years with the latest revision coming into effect this November. A Honda official claimed that the hikes are above industry standards. The new wages are applicable to over 800 workers in the company.

According to a Toyota official, the management and the workers signed a wage agreement recently which gives the workers an annual hike of around 16 per cent, the same increase given to them during the previous year. The official, however, said that the annual wage increase is not being seen as a burden in a company, which prides itself in reducing costs at every level. "We don't see wage increases as a burden but as an incentive for a work done well," the official said.

Toyota has witnessed several strikes in its plant near Bangalore, and is also perhaps one of the few to see labour unrest among all its plants worldwide. Sources say that some of the labour issues are yet to be resolved. For example, the issue of sacked workers is still with the labour court. Toyota will need to resolve such issues faster if it wants to prepare itself to enter the volume game, an auto analyst said.

Toyota, which makes Innova and Corolla in its Indian plant, expects to reach a major milestone of producing 50,000 cars by the end of this year, which will be nearly 20 per cent higher than last year.