Toyota Kirloskar has rolled out a voluntary separation scheme, the first since it started its operations 22 years ago.
A top official of the company told BusinessLine that this scheme was not being carried out because of the downturn in the auto industry.
“It is not a knee jerk reaction to the slowdown in the industry. We have been around for over 20 years and some of our employees are getting that much older, and hence, we needed to rationalise our workforce,” said Shekar Viswanathan, Vice-Chairman of Toyota Kirloskar. He said until now, no one has been let go because of the slowdown in the industry.
There are over 6,000 workers employed at the two plants of the company. About one-third of the total number of employees have been working for the company since it started operations in 1998. The rest of them were recruited when the second plant was set up.
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The first plant with a capacity of one lakh units produces SUV Fortuner and MPV Innova while the second plant with a capacity of 2.1 lakh units produces Etios and Liva passenger cars, among other brands. The second plant is working at less than 40 per cent capacity while the first plant is working at almost full capacity. The average age of the employees is about 35 years. The company also has some contract employees who do not work on the mainline in the factory.
The separation scheme is open to those who have worked with the company for over five years and the window to make use of the scheme will be open for a month. Older employees, especially those who were recruited for the first plant, are expected to opt for this scheme. The average salary of the employees with over 10 years of experience is between ₹70,000 and ₹75,000 per month.
The package is based on three components: completed years of service, remaining years of service and a lump sum amount based on the remaining years of service. “The entire scheme has been in the works for a while and was rolled out after carrying out negotiations with the employees’ union,” said Viswanathan.