Shrinking U.S. Demand Spurs Layoffs At Japanese Toyota Plant

TOKYO — Japanese automaker Toyota has laid off 800 people at a plant in southwestern Japan, or about 10 percent of the plant's work force, in response to declining sales in North America, a company official said Tuesday.

All the job cuts _ carried out in June and August at Toyota Motor Corp.'s wholly owned subsidiary Toyota Motor Kyushu _ applied to workers sent by job-referral agencies. Japanese companies are increasingly relying on such agencies for temporary workers called "haken" to be flexible to market demand.

Prior to the layoffs, Toyota Motor Kyushu, which makes Lexus luxury models, had employed 8,200 workers _ 1,950 of them haken _ an official said on condition of anonymity, citing company policy.

Many Japanese companies demand individual names be left out of comments to the media even if they are official spokespeople.

The official said the job cuts were temporary and 500 haken workers will be brought back later this year. He declined to comment on why they would be needed back, saying product plans can't be released.

The shift to temporary workers or haken marks a change for major Japanese companies, including Toyota, which used to encourage corporate loyalty among its ranks by offering lifetime employment. Haken agencies have become booming businesses but have set off a spate of social problems such as poverty and discontent, especially among the young.

The trend toward these temporary workers drew alarm in Japan when a disgruntled haken employee at a Toyota affiliate went on stabbing spree in June in a crowded Tokyo shopping district, killing seven and injuring 10.

The remarks of Tomohiro Kato, the 25-year-old haken worker, expressing frustrations about job stability and getting treated with no respect, added to the public worries about the trend.

Toyota, which employs about 12,000 contract and haken workers, about 15 percent of its 80,000-strong work force in Japan, issued a condolence statement for the crime victims at that time.

Toyota has avoided the losses of its U.S. counterparts like General Motors Corp. and Ford Motor Co. But it is projecting its first full-year profit drop in seven years for this fiscal year through March 2009. Toyota reports first fiscal quarter earnings Thursday.

Last month, Toyota lowered its global vehicle sales plan for this year by 350,000 vehicles to 9.5 million vehicles, blaming the sluggish North American market. The pace of Toyota's growth has been slowing to a 1 percent gain this year in contrast to a 6 percent climb in 2007.

Toyota saw its U.S. vehicle sales plunge 12 percent in July on year as it struggled to keep up with consumers' growing demand for smaller, more fuel-efficient vehicles.

Comments

[Bettysdad]

You mean Japanese automakers are as stupid as Americans?

[IntrepidReader]

Unless I read it wrong, the article said it was the plant producing the Lexus luxury line of expensive, uneconomical and over-horsepowered cars, though I'm sure Toyota is chopping production of their poor-selling trucks and big SUVs as well.

A close friend of mine buys a new Prius every 2 years. She drives quite a lot and gets rid of them when they approach 50,000 miles. The resale is so good that it's not expensive for her to update. She reports that her 2007 is distinctly inferior to previous editions, with some problems that still haven't been resolved completely and worse gas mileage than the 2005 she had previously. Toyota may be building them as fast as possible, but it sounds as if the quality may be declining because of that haste.

[MajorKong]

Somewhere I read that a used Prius is going for more than a new one right now because there's a waiting list for new ones.

[TunaFish]

Toyota's Tundra plant in San Antonio is closing from August 8 until sometime in November. They will also move production from their Indiana plant to the Texas plant next year. I think that they also let most, or all of their temps go at the SA plant. Supposedly the permanent employees her in SA will have other work to do. Not sure what happens to the Indiana plant next year?

One other thing about this is that the Toyota supplier community will also have to make changes in production and work force.

[TrooAmerican]

GM and Ford have known about this impending oil issue and pushback on gas guzzlers long ago.
These guys always know whats coming.

The fact is they banked their futures by making decisions like "we're going to use our lobbying power and threats to cut jobs if the govt doesnt keep mpg standard and emissions where we want them so we can keep making huge profits off old technology and low investment and send that to our stockholders, and reward our CEOs for this exact idiocy."

funny thing is, had they changed their mindsets and stopped trying to influence legislation to help them in the short term make more profit off of bad policy, they would have been retooled and making profits and keeping employees by the tens of thousands by now, and adding to domestic commerce of large durable goods.

But noooooooo, cant ever think about the future of business, have to keep sucking out all the profit we can with as little real work and planning as possible but instead by using a little of our profits to BUY votes and influence from easily Bribed politicians. All while our competition invests in the future, changes with the times, and makes products people consider to be a better value.

[mediamarv]

Send them over to the Prius factory, they are selling them as fast as they can make them..

Too bad GM couldn't see the forest for the trees. Hummer anyone??

[Tom95134]

While they don't break this out as to the models being produced at the specific plants, I sustect that these are plants that build the Toyota trucks. As far as I know the demand for the smaller cars and the Prius remains very high.

[rbspickles]

Do you see what happens when all the money goes to the top 2%? Henry Ford knew how to run a business. CEOs need to go back and study history again. When they keep all the money to themselves, their workers can no longer afford to buy their products. Duh.