Toyota Plans Worker Buyouts
Toyota Motor Corp., the world’s largest automaker, will freeze wages and offer voluntary buyouts to plant workers in North America for the first time as the company widens output cuts to adjust for slumping demand.
The company will cut pay for factory executives and eliminate bonuses for all salaried production unit staff, Toyota said in an e-mailed statement late yesterday. The Toyota City, Japan-based carmaker is making further cuts in its assembly schedule for April, and creating a “work-sharing” program to reduce work hours at some plants, spokesman Mike Goss said.
Since passing General Motors Corp. in global sales last year, Toyota has forecast its first operating loss in 71 years as the global recession cripples demand for its Camry sedans and Tundra pickups. Toyota posted a 32 percent U.S. sales drop in January and has already announced plans to curb output at plants in the U.S., Canada and Mexico.
“Welcome to being No. 1,” said IHS Global Insight analyst Rebecca Lindland, who is based in Lexington, Massachusetts. “Toyota’s profile is now very similar to that of a Big 3 U.S. manufacturer, in terms of product. They’re running into some of the same issues in the downturn.”
At its U.S. sales headquarters in Torrance, California, Toyota has cut “a few hundred” temporary workers and frozen wages at the current level, spokesman Mike Michels said. While further steps may include a reduction of performance bonuses, no decision has been made yet, Michels said.
Reduced Work Hours
The company is creating an optional program for assembly workers who wish to leave voluntarily, Goss said. The buyout offers 10 weeks of pay plus two weeks of pay for every year of service, and a $20,000 lump-sum payment. Toyota has no numerical target for the plan, Goss said.
Under the “work-sharing” program, production employees will work and be paid 72 hours instead of 80 during the two-week pay period, Toyota said.
“We’re not laying anybody off,” Goss, who is based in Erlanger, Kentucky, said. Bloomberg