Toyota Seeks To Shed U.S. Workers
by :Tina Wang
Toyota Motor's incoming president, Akio Toyoda, has promised to make aggressive changes. They're already happening.
The Japanese automaker will try to buy out American workers for the first time as it cuts production, and will slash compensation for North American executives. But it seems no matter what it does, Toyota will simply not make money until at least 2010.
Facing its first-ever full-year loss, of around $5 billion, Toyota (nyse: TM - news - people ) is operating in crisis mode, conserving cash and hunkering down to ride out a deepening demand slump. Toyota said Thursday it will make buyout offers to about 18,000 workers at three U.S. assembly plants and three U.S. auto parts factories, cut salaries of its North American executives by 5% and eliminate their bonuses, and further slash output at U.S. plants.
Toyota will idle some U.S. factories for two to eight days, starting in April, based on inventory levels, and reduce the number of work hours at some plants. The changes will affect the automaker's assembly plants in Indiana, Kentucky, Mississippi and Texas and auto parts factories in Alabama, Missouri and West Virginia.
The company doesn't expect a large number of workers to accept the buyout offer given the poor state of the economy, so most of the savings likely will come from the reduction of compensation and work hours.
“If no one decides to leave, that is fine by Toyota,” said Toyota spokesman Paul Nolasco, who added that Toyota has no target for how many employees will exit.
The moves are part of Toyota's effort to save 800 billion yen ($8.8 billion) for the fiscal year ending March, through reduction of fixed costs by 500 billion yen ($5.5 billion) and savings of 300 billion yen ($3.3 billion) from lower input costs.
source : Forbes.com
