Add a few more folks to the crowd behind the 2010 Toyota Prius, as the automaker has returned to hiring mode to meet growing demand for the third-generation hybrid.
For more than a year, now, the global auto industry has seemed to be stuck in reverse, but there are some telling signs manufacturers may be ready to shift back into drive – including Toyota’s decision to hire 800 contract workers in Japan, its first big job increase since last year’s Wall Street meltdown sent the global economy into a tailspin.
The Japanese giant specifically credits the upturn in demand for its third-generation Prius hybrid, which has seen a sharp upturn in sales in key markets like the U.S. as well as the home market, in Japan, where the fuel-efficient sedan has been the country’s best-selling product for four months in a row.
The vast majority of Toyota’s new contract workers will help man the company’s Tsutsumi assembly plant, which produces the Prius and several other models.
Contract workers are the dark secret of the Japanese economy. Regular employees are effectively granted lifetime employment, but contractors can be terminated whenever demand wanes. At its peak, in June 2005, Toyota had 11,600 of these temporary workers on its books, in Japan, though their numbers are currently down to just 1,300.
The decline reflected Toyota’s unexpected slump in the wake of the recession. Just last year, the automaker surged past General Motors, to become the world’s largest automaker. But this year, it has suffered significant setbacks around the world, and notably in the American market. That generated the company’s worst-ever loss of $4.6 billion for the fiscal year that ended March 31st.
While Toyota may be adding contractors back in Japan, it is still cutting back in other parts of the world. It announced, late last month, plans to close the 25-year-old NUMMI plant, in Fremont, California. The operation – the only one in the U.S. with a union workforce – was originally opened as part of a joint venture with General Motors. Following its emergence from bankruptcy, in July, GM announced it would pull out of NUMMI, since the assembly line produced vehicles for the Pontiac brand, which is being shut down.
While the hirings by Toyota are modest, there are other positive signs, including an announcement from GM, last month, that it would also bring back more than 1,000 workers to help increase production. Ford has also announced a production increase, driven in part by the Cash-for-Clunkers program, which sharply drew down its inventories, but so far, the smaller U.S. maker does not plan to increase employment.