Toyota Motor Manufacturing (UK) (TMMUK) is considering both short-time working or suspending production completely at its two plants here, possibly adding to production cuts that began as long ago as last September.

The automaker employs 3,900 at Burnsaton in Derbyshire building the Auris (Corolla hatchback) and the newly launched redesigned D-segment Avensis, plus just under 600 at an engine plant in Wales.

Plant spokesman Steve Carter said the company had been steadily "reducing volume in response to market".

Toyota had, over nine months, ended all its temporary worker contracts and had stopped the Auris line night shift for five months at the end of September.

At the end of December, the automaker told workers the last week of February and the first week of March would also be non-production weeks.

"On Monday we met with our employee representatives... and discussed measures to further reduce our costs."

He said Toyota's "underlying philosophy" was to "maintain permanent employment" as much as possible. Measures on the table included reducing the working week or short-term suspension of work at the plant.

Deeside engine plant employee representative Martin Fry yesterday told the BBC workers there had been told Toyota was seeking to reduce its wage bill by between 10 and 20%, which could mean workers being put on a four or a four-and-a-half day week.

He said Toyota was open to suggestions because it was trying to avoid lay offs but on current production levels the firm had 1,200 "surplus" employees between Deeside and the Burnaston assembly plant.

Carter would not discuss details but indicated that workers would face wage cuts while suspended.

"There is provision in our existing union agreement which would allow us to do that but, at this stage, these are only options under consideration," he added.

"Employees recognise we need to take these further actions to maintain employment so we will consult with our entire workforce."

Toyota would hold further consultation meetings with its workers in mid-February and early March before putting its plans into place from 1 April, Carter added.

"Our commitment is to make every effort to secure employment for our permanent employees," he said.

"Redundancies are not included in the measures proposed by the company. Our employees recognise we do need to take further action."

Carter said any measures taken would affect both Derby car assembly and Deeside engine plants. He noted, however, that Deeside would continue to make engines in the week of 23 February while Derby car output was suspended (though workers would still report to the plant). Both plants would suspend production in the week starting 2 March.

The engine plant makes Toyota's ZR engine line for cars built at Burnaston. Toyota last year announced plans to make the new NR engine line there as well from later this year but the GBP88m project was subsequently suspended as part of a parent company review of planned global investments that has also seen a review of plans for new plants in Brazil and India.

Toyota last week denied Japanese media reports it was planning job cuts in both the US and UK after experiencing a 4% drop in global sales. It has said it expects to make its first ever operating loss for the financial year ending 31 March.

Its Japanese rival Honda recently suspended all production at its UK plant until June while Nissan earlier this month announced plans to axe a shift and make 1,200 workers redundant. The parent companies in Japan have also been cutting production and laying off most, or even all, of their temporary workers.

The Japanese automakers will announce their third fiscal quarter results in the next week or so. A Reuters Estimates analysts poll last night suggested the figures would be grim.

Graeme Roberts