Toyota denies threat to pull out of proposed Turkish expansion

By bne IntelliNews July 31, 2012

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Japanese carmaker Toyota on July 30 denied reports that it has threatened to pull out of a planned expansion of its Turkish plant unless the government helps it rein in a series of injury claims by employees. The company insists instead that it stands ready to deepen its investment by €150m and take on at least 800 new staff.

Without citing sources, local newspaper Star reported that Toyota had sent a delegation to meet with officials from Turkey's Labour Ministry to threaten a halt to new investment in Turkey after a number of employees filed lawsuits. According to the report, one employee won TRY150,000 ($83,000) in compensation from a Turkish court recently for loss of feeling in a finger. That success has prompted over a dozen others to pursue cases against the company. The paper added that Toyota has previously been accused of discriminating against employees who practice the Islamic faith.

A statement from Toyota Otomotiv Sanayi Turkiye angrily denied the claim, reports Bloomberg, with the company stating that it remains committed to building on its €1.2bn investment in Turkey. "Toyota did not send a delegation from Japan to Ankara and did not threaten to end investments in Turkey," the statement bluntly insisted. Toyota has had four cases related to workplace safety opened against it in about 18 years of operation in Turkey, the statement continued, claiming that all were judged by courts to be without merit.

In fact, Toyota Turkey's general manager and CEO, Orhan Ozer, claimed that the company is set to create up to 800 new jobs, with production of a new model due to kick off next year at the Sakarya plant in the northwest of the country, reports Toyota currently manufactures the Auris hatchback and Verso family saloon in Turkey. Ozer announced that a new sedan passenger vehicle will be added to the production line with an investment of €150m. "Beginning early next year, Toyota Turkey will begin adding around 800 new employees to its workforce at the Sakarya plant," Ozer said adding that the exact figure of new employment may be higher as the company is still in the planning stages of the project.

Ozer was also careful to praise the workforce that the company is accused of fighting, claiming that the Turkish plant has the highest production quality of all Toyota plants outside Japan. "Our skilled workforce combined with the fully-implemented Toyota Production System is a major contributor to our success. Turkish workers' loyalty and devotion to the workplace is remarkable. This is also evident in other automotive companies in Turkey like Renault, Ford, and Fiat."

Toyota is expected to begin production of the 11th generation compact sedan by June next year, with the plant's capacity set to increase to 210,000 cars per year. According to earlier statements from the company's European headquarters, Auris production will shift to the company's UK factory, while Verso production will remain in Turkey alongside the new sedan with increased utilization of locally procured parts.

A report by Japan's Nikkei earlier in July suggested Toyota was seeking to double 2011 capacity of 130,000 this year, as part of a drive by Asian carmakers to boost production in Turkey. On top of Turkey's own rapid economic development, the country is seen as a base from which to access emerging markets around the region. Toyota, which currently exports to 32 countries, will boost this number to 50 with the inclusion of Tunisia, Egypt, as well as other Middle Eastern and ex-Soviet countries, the report claimed.

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