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 the company widens output cuts to adjust for slumping demand, Bloomberg reported.
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."
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. Further steps may include the elimination of performance bonuses, Michels said.
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