Toyota is to offer 18,000 workers buyouts and is introducing work sharing for the first time as part of a new package of measures at its North American manufacturing plants “designed to further reduce production in the midst of the worst automotive slump in decades”.
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“The new actions are consistent with the company’s philosophy of making every effort to protect jobs during the sales downturn,” the NA manufacturing unit said in a statement.
“We’ve taken responsible, step-by-step actions to address this issue in recent months, and we hope the new measures will help us adjust while protecting jobs,” added Jim Wiseman, vice president of external affairs for Toyota Motor Engineering & Manufacturing North America (TEMA).
“This philosophy of shared sacrifice is the best approach for us, and hopefully will make us a stronger company in the long term.”
TEMA had previously scheduled periodic non-production days as needed, but protected jobs by providing training and plant [and community] improvement activities, established a hiring freeze, eliminated overtime and suspended capital spending.
Now it is scheduling some additional non-production days in April, varying from plant to plant and is considering reduced work/pay weeks, known as “work sharing,” at some plants. Production workers at affected plants would work and be paid for 72 hours instead of 80 during a two-week pay period.
Kyodo News said the work-sharing programme for about 12,000 employees in six US factories would be the first time the automaker had fully adopted a work-sharing arrangement in which workers were paid less for fewer working hours.
Toyota has been rapidly reducing temporary jobs in Japan. But it hopes to stem labour costs and avoid further layoffs by adopting such work-sharing measures overseas, company officials in Japan told Kyodo.
Toyota’s statement said executive and salaried staff bonuses have been eliminated, executives’ pay cut, wage rises cancelled “ for the foreseeable future” and a voluntary exit programme introduced “for team members who wish to pursue other opportunities”.
“The global economy is in a once-in-a-century situation … Nobody knows if these steps will be enough given the uncertain outlook,” Mitsubishi UFJ Securities analyst Shotaro Noguchi in Tokyo told Reuters.
“Inventory levels are still high, and a recovery in demand is not in sight yet. Toyota may have to adopt work-sharing in Japan in line with production cuts, at the same time as reducing overtime work.”
Toyota has said it would post an operating loss of some US$4.95bn for the fiscal year to 31 March, the first group-wide operating loss in its 70-year history.
Noguchi told Reuters Toyota’s latest North American announcement detailed previously disclosed plans to cut costs by JPY500bn ($5.5bn) in the fiscal year from 1 April.
Toyota had said on 6 February it would slash fixed costs, including labour and other costs, by 10% in the year to March 2010, partly by reviewing employment terms globally.
The company is holding talks with its UK workers over production adjustments needed from 1 April onwards. As in the US, production has already been cut by such measures as reducing shifts.
