Production cuts for Tundra, pay cuts for executives
Underscoring the spreading impact of the global automotive downturn, Toyota Motor Co. plans to make extensive job cuts at operations in the U.S., Japan and elsewhere, while also trimming by as much as 10 percent the hours of operation at its U.S. assembly plants.
The likelihood of such cuts was first reported by TheDetroitBureau.com, though at the time, Toyota declined to discuss specific details, wishing to first lock down its plan and communicate the situation internally, directly to its employees.
The situation reflects the fact that Toyota is suffering from sharp sales declines, especially in the United States, where recent monthly numbers have been off by as much as 30 percent or more, year-to-year.
“We are not immune,” Don Esmond, Toyota Motor Sales USA’s second-in-command, told this website, during an interview at the North American International Auto Show, last month.
It’s still not clear exactly how many jobs will be eliminated, though sources earlier told TheDetroitBureau.com that more than 1,000 workers could be offered buyouts in the U.S. alone.
Toyota, meanwhile, is planning to trim the hours of production at some American “transplant” assembly lines by as much as 10 percent, reflecting an unusual build-up of inventory in the current slump. Traditionally, Toyota has struggled to meet demand from the American market, but has had numerous “down” weeks of production since the auto slump fully took hold, during the third quarter of 2008.
The automaker has already announced it is putting an indefinite hold on a new plant, in Mississippi, which was originally intended to produce Highlander SUVs, then shifted to Prius production, as gasoline prices soared past the $4-a-gallon mark. Since last Spring, however, Prius sales have plunged by 75 percent, and the automaker will, at least for the immediate future, continue bringing the hybrid in from factories in Japan.
The pain is being felt at all levels of the company, with Toyota cutting executive pay, and eliminating bonuses for 3,500 salaried employees and executives. Bonuses for hourly workers have also been put on hold.
The cutbacks come at a bittersweet moment for Toyota. The carmaker finally usurped General Motors, to become the world’s largest auto manufacturer, in 2008. But that won’t do much for the bottom line, Toyota expecting to report a more than $4 billion loss for the fiscal year ending March 31 – its first annual loss in 59 years.