Toyota on strike

The production at the Toyota factory ceased as more than 3000 striking employees demand a better pay agreement.

The strike has removed around 580 cars from the company's production plan with the prospect of a similar number not being built as the protected industrial action continues today, which also effects some suppliers.

The industrial action took an ugly turn as around 400 employees who did turn up for work received threatening letters, something the union has denied any involvement in - AMWU acting national secretary (vehicle division) David Smith said the letter did "not endorse this sort of thing in the workplace and we will undertake further inquiries when the workforce comes back."

Mr Smith said the negotiating parties were at a stalemate.

"At the moment we're at a stalemate .... we're entrenched and there doesn't seem to be too much middle ground," he said.

Mr Smith said the union's membership were concerned at the timing of Toyota's proposed agreement, as well as the percentage increase during the first 12 months.

"They're proposing 11 per cent over 39 months and we're looking for 12 per cent over 36 months - the sticking point is when the agreement would operate from - July 26 was when the old agreement stopped," he said.

Toyota's offer involves a two and 2.5 per cent rise by April next year, followed by a 3 per cent the following year and then 3.5 per cent in the third year.

Spokeswoman Laura Hill said the company was hoping to continue negotiations with the union next week and avoid any further stoppages.

"We will try to get something finalised before next week, we'll started renegotiating next week, we'd love to be able to come to an agreement, if we can finalise an agreement early next week that would be a very good outcome," she said.

Toyota Australia president and CEO Max Yasuda said the production halt stoppages will cause significant short term pain and have long term consequences for domestic and export markets.

"Industrial action at this time can only hurt Toyota Australia's case to maintain its export program, if Australian operations are uncompetitive and perceived as unreliable, these cars can be made in another Toyota plant. It puts a serious dent in Australia's reputation as a car maker and reduces job security for our employees," he said.

The company expects to lose a similar amount of production - equating to around 580 cars - to industrial action today.