Toyota Confirms New North American Production Cuts

And the story continues... Unfortunately for both automotive sector and for the North American industry, Toyota today confirmed a couple of new cost-cutting measure, pointing to the same over-discussed and much-debated economic crisis that slashed sales all over the world. In short terms, Toyota said it will start a new cost-cutting schedule in the next few months that will massively reduce production in this region but, at the same time, will preserve jobs at local plants.

“We’ve taken responsible, step-by-step actions to address this issue in recent months, and we hope the new measures will help us adjust while protecting jobs,” said Jim Wiseman, vice president of external affairs for Toyota Motor Engineering & Manufacturing North America (TEMA). “This philosophy of shared sacrifice is the best approach for us, and hopefully will make us a stronger company in the long term.”

As you probably heard, Toyota already applied a number of cost-cutting measures, including the elimination of overtime, the suspension of capital spending plus a hiring freeze at most of its plants. In addition, the company scheduled several non-production days, in an effort to align production with the collapsing new car demand.

Toyota says even more non-production days will be announced in April, but their number will vary from plant to plant. Executive and salaried bonuses have been eliminated while most executives received pay cuts, Toyota said in a statement for the press. The company also reduced production team member bonuses and established a voluntary exit program for team member who wish to pursue other opportunities.

No wage increases will be approved for the foreseeable future, Toyota said, corroborated with “strong possibility of reduced work/pay weeks, known as “work sharing,” at some plants - production team members at affected plants would work and be paid 72 hours instead of 80 during the two-week pay period,” as the manufacturer explained.