Overview the case & identification of the potential problem

Case Overview

TKM (Toyota Kirloskar Motors) - a JV between Toyota & Kirloskar operating in Indian market (India is 4 th largest
automobile market and was expected to be global leader by 2025). Market Invited many new auto makers.to India.

The TKM was the only car manufacturing unit of Toyota and its Bidadi plant at Karnataka produced most of
the Toyota Cars Models.

Bidadi plant faced Intermittent Labour unrest from inception.

Post Covid, in the last quarter 2020, the cars demand surged. To meet the demand & stay in competition TKM revised
takt time from 3 to 2.5 min to produce more cars from existing resources.

It led to worker dissatisfaction as it increased the workload

About 1200 workers opposed. So, Management further suspended 39 workers & imposed complete lockout and
stopped the operation.

All these led to lockout of about one-and-a-half months. Fulfilling

TKM and Maruti Suzuki had a cross-badging strategy, with Maruti which led to the production of 50% of the TKM
sales units in India Other Subsidiary unit supplying spares parts were operational.

Anyhow long lockout & only 50 % production made TKM investors restless.

TKM management was under pressure to resolve the issues with workers quickly

Potential Problem
 TKM Implemented its Japanese TPS (Toyota Production Model) in India without factoring the cultural
differences.
 Takt time revision without deploying additional resources (labour or machineries)
Not consulted with the Workers or labour Union.
SWOT analysis not conducted to cater Intermittent strike from inception

 Management & employee union were not willing to talk.

 Stretching of the Strike for more than 1.5 months.

having a plant at Bidadi man

 In 2020, India was the 4th largest in Automobile & research projected that India could become a global leader
by 2025. Lucrative market invited multiple automakers. FDI of USD24.53 between 2000 to 2020.

 TKM (Toyota Kirloskar Motors) is a JV between Toyota, Japan (89% Share) & Kirloskar, India ( 11%) which
was formed in 1997 & was having 3.1% market share with 127.6 % YOY growth.

 The TKM was the only car manufacturing unit of Toyota and its Bidadi plant at Karnataka produced
most of the Toyota Cars Models.
  TKM Implemented its Japanese TPS (Toyota Production Model) in India without factoring the cultural
differences.

 Bidadi plant faced Intermittent Labour unrest from inception.

 The relationship between workers and management was never smooth it led to formation of employee union
in 2001.

 Post Covid, in the last quarter 2020, the cars demand surged. To meet the demand & stay in competition TKM
revised takt time from 3 to 2.5 min to produce more cars from existing resources only without consulting the
workers.

 However, it led to worker dissatisfaction as it increased the workload. No additional workforce deployed after
this takt time reduction.

 Also, any defect or resistance to this revision resulted in disciplinary actions like suspension of union member.

 In Nov,2020 about 1200 workers opposed. So, Management further suspended 39 workers & imposed
complete lockout and stopped the operation.

 Following govt. direction, factory was reopened on Nov,19 but a group of workers vandalised the equipment
and threatened workers who were willing to work.

 All these further led to lockout of about one-and-a-half months.

 Management & employee union were not willing to talk.

 TKM and Maruti Suzuki had a cross-badging strategy, 50% of the TKM sales units in India were produced by
Maruti. Other Subsidiary unit supplying spares parts were operational.

 Anyhow long lockout & only 50 % production made TKM investors restless.

 TKM management was under pressure to resolve the issues with workers quickly.

As the lockout and the unrest continued,

Who are the stakeholders of TKM, and who is responsible for the crisis discussed in this case?

Stakeholder Responsibility
Toyota Management 1. Involve the workers & their representatives prior to any change in shop floor.
Implementation of their corrective suggestions.
2. Reward & Recognition to workers & employee for their positive contribution.
3. Deployment of necessary resources prior to any change for its success.
4. Top Leaders Connect \Open houses with the stakeholders (especially workers.)
5. Development of Business Relationship with the local leaders & government.
6. Plan for the development of alternative and redundant automotive plants.
7. Managing the supply chain with overseas plants.
 8. Proper Behavioural & Technical training to all workers and management
employees on continual basis. Analyse the training effectiveness & make suitable
change. Involve workers family members also.
9. Formulation\Tweaking of the company policies considering the Indian Culture.
Worker Union 1. Co-operative participation in talk with management for any issues.
2. Must perform strikes as per the laws.
3. No Vandalising of equipment or threatening to other workers
4. Adherence to the rules & regulation & constitutional laws
State Government & 1. Early intervention, co-ordination and collaboration among the parties in the
Administration critical strike\lockout cases.
Investors 1. Utilisation of the geo-political & commercial relationship for early resolution of
any issues.
2. Expansion Plan & further tie-up with other automotive industries.