Toyota Plans Wage Freeze, Buyouts in North America as Output Cuts Increase

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Toyota to Offer Worker Buyouts, Freeze Wages in North America
By Alan Ohnsman


Feb. 13 (Bloomberg) -- 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.

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” 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 reduce output at its 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.”

Toyota is creating an optional program for employees 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 buyout plan, Goss said. .......(more)

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