Toyota Kirloskar to let temporary workers go

K. Giriprakash Updated - August 05, 2013 at 10:26 PM.

Sliding domestic auto sales have forced Toyota Kirloskar not to renew the contracts of its temporary workers, as well as work at only about 60 per cent of the total capacity.

A top official with Toyota Kirloskar told Business Line the company was letting go of its temporary workers whenever their contract expired. This had led to fall in their numbers from 1,800 a year ago to about 1,200 now.

The official said lower volumes were forcing the company to trim production. “We will be working at about 60 per cent of our total capacity this entire fiscal,” he said.

The total capacity of the two plants of Toyota Kirloskar is about 3.10 lakh units. The number of vehicles produced has now come down to about 1.85 lakh units. Including exports, it comes to about 2 lakh units a year.

However, there wouldn’t be any layoff of permanent workers because of the slowdown, the official said. He also pointed out that contract workers got similar benefits as permanent workers. Also, their wages were much higher than the minimum wages prescribed by the Government, he said.

Sources in the company had earlier said it might post losses this fiscal, its first ever in over a decade, because of fluctuating foreign exchange rates and falling sales. The losses were estimated at Rs 150-180 crore on a turnover of Rs 14,000 crore.

Meanwhile, Toyota Kirloskar’s Vice-Chairman, Shekar Viswanathan, said unless the Government lowered excise duty, the industry would not revive for a while. “It is important the Union Finance Ministry realises that it is extremely important to revive a key sector like the auto sector for the overall economy to do well,” he said.

giriprakash.k@thehindu.co.in

Published on August 5, 2013 16:56