Toyota plans production cuts, job reductions in North America

Toyota Motor Corp., the world's largest automaker, will freeze wages and offer voluntary redundancy to plant workers in North America for the first time as it widens output cuts to adjust for slumping vehicle demand.

North America is Toyota's largest market, where it sold 521,000 vehicles in the October-December quarter, compared with 465,000 in its next-biggest market, Japan. As per its latest forecast, Toyota expects North American sales to drop to 2.07 million units during the current financial year ending 31 March, from 2.96 million units in the previous financial year.

Sales are also expected to drop in its home market to 1.94 million units this fiscal year from 2.19 million.

The company will cut pay for factory executives and eliminate bonuses for all salaried employees, 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 ''job-sharing'' programme to reduce work hours at some plants, spokesman Mike Goss said. Toyota also said it sees "no wage increases for the foreseeable future."

Toyota Motor Engineering & Manufacturing North America Inc, which employs roughly 25,000 workers, is offering all of them 10 weeks of pay, two weeks of additional pay for every year of service and $20,000 to leave the company. Goss said the company doesn't expect a significant number of workers to take the offer and that it didn't have any target for the "voluntary exit program."

Toyota said the moves were intended to keep as many of its North American workers on the payroll as possible. "We hope the new measures will help us adjust while protecting jobs," Toyota Motor Engineering and Manufacturing vice president Jim Wiseman said.