Toyota is frantically cutting production as the global financial crisis sends sales plummeting and puts it on course for its first ever operating loss in the year to March. Its U.S. sales in December fell 37 percent.
Throughout its history Toyota has for the most part avoided major reductions of regular staff, with the exception of an early retirement scheme in Japan in 1950 and cuts to staff in Thailand in 1997 in the wake of the Asian financial crisis.
But now, faced with the loss, Toyota is considering going beyond cutting temporary and contract staff to easing out regular employees in Britain and North America, said the source, who spoke on condition of anonymity because the plan has not been made public.
The cuts would be made through early retirement and other voluntary programmes and the world's largest car maker was not planning any involuntary cuts, the source said.
A Toyota spokesman said the car maker was considering additional cost cutting in North America amid an unprecedented auto industry downturn.
"No decisions have been finalised," Toyota spokesman Mike Goss said in a statement. "However, current business conditions are not forcing us to make involuntary reductions of Toyota team members."
Shares of Toyota closed down 1.6 percent at 2,810 yen, outperforming the benchmark Nikkei average .N225, which fell 3.8 percent.
The Japanese business daily Nikkei said Toyota was considering cutting up to 1,000 full-time jobs in North America and Britain, as shoppers stop buying cars and the pressure to cut fixed costs mounts.
The decision on job reductions and possible pay cuts would likely be made as early as next week, the Nikkei said on its website without citing any sources.
The company, which has just picked Akio Toyoda, the grandson of the company's founder, as its new head, aims to cushion the blow for employees with steps such as raising retirement bonuses and helping with job searches, the paper said. [ID:nT339552]
Toyota's U.S. sales for the whole of 2008 fell 15 percent, a less severe fall than the industry's 18 percent slide, but it has still had to cut North American production of best-selling cars such as the Camry and Corolla sedans, as inventories rise.
Toyota has suspended work on a new plant in Mississippi slated to produce its Prius hybrid car beginning in 2010, as the U.S. economic woes prompt rivals Honda Motor Co Ltd (7267.T) and Nissan Motor Co Ltd (7201.T) to also cut output.
Source : Reuters
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]
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