Life & Style | Motoring
Toyota could cut US jobs as sales drop
The worst US auto market since the early 1990s may force Toyota Motor Corporation to do something that was once unthinkable: cut its North American payroll.
- Bloomberg
- Published: 23:42 December 23, 2008
Tokyo: The worst US auto market since the early 1990s may force Toyota Motor Corporation to do something that was once unthinkable: cut its North American payroll.
Asia's largest automaker, which hasn't shed workers in 24 years of building cars in the US, is exhausting options to trim costs after halting work on a Prius plant in Mississippi, idling a Texas truck factory for 15 weeks and planning to pare US and Canadian output next month.
"If we don't see a rebound by the second half of next year, they'd probably have to consider layoffs," said Haig Stoddard, an analyst at forecaster IHS Global Insight Inc in Michigan.
Adding to the pressure on North American operations amid a 13 per cent slump in US sales will be Toyota's first operating loss in 71 years.
Deficit
Toyota yesterday projected a deficit of 150 billion yen (Dh6.12 billion) in the year ending March, erasing a forecast for a 600 billion yen profit. Job cuts cannot be ruled out as sales continue to fall, said Jim Wiseman, vice-president of external affairs for Toyota's US production unit.
Toyota has 30,000 North American employees and vehicles built in the region made up 56 per cent of US sales through November.
The Toyota City, Japan-based company has not cut full-time workers since 1950 in Japan. Toyota adopted a lifetime employment policy after years of labour turmoil, said Jim Womack, chairman and founder of Lean Enterprise Institute in Brookline, Massachusetts.
Regional production fell 13 per cent to 1.45 million units through December 20, according to trade publication Automotive News. Most of the drop came from idling the San Antonio plant and an assembly line in Princeton, Indiana, from August 8 until November 3 as inventory of Tundra pickups swelled.
The 2,000 San Antonio workers stayed on the payroll to train, work on efficiency improvements and even do community service - practices that may become less tenable.
While the 13 per cent drop through November is smaller than the industry's 16 per cent average, Toyota lags behind its biggest Japan-based competitors.
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