More job cuts on the way for car makers

By Makiko Kitamura  |   2008-11-22  |     NEWSPAPER EDITION

TOYOTA Motor Corp, Japan's biggest car maker, announced yesterday that it will cut its domestic temporary workforce by 50 percent as vehicle demand slumps globally.

Toyota will cut the number of workers to 3,000 from 6,000 by the end of March, spokesman Paul Nolasco told Bloomberg News.

The auto maker follows Mazda Motor Corp and Isuzu Motors Ltd, which on Thursday said they would slash a combined 2,700 temporary jobs in Japan in response to slowing sales. Earlier this month, Toyota forecast a 68 percent drop in full-year net income, the biggest decline in at least 18 years, as a global recession bites.

"Falling export demand is having a big impact on production in Japan," said Hirofumi Yokoi, a Tokyo-based analyst at automotive consulting company CSM Worldwide. "It's unlikely plants will get shut down, but if things get worse, lines (and) shifts will have to be stopped and plans for new factories will be delayed."

Japanese companies, which focused on hiring easy-to-fire contract workers during the 15 years of lackluster economic growth that followed the bursting of the bubble economy in 1990, are now shedding them as the global recession cuts demand.

UK fallout

Temporary and part-time workers make up 33 percent of Japan's workforce, up from 20 percent in 1991, according to the Labor Ministry.

Honda Motor Co, Japan's second-largest car maker, said yesterday that it was cutting 270 temporary workers at its Saitama plant, where it is reducing output of Accord sedans by 40,000 units.

Honda is also cutting production in the United Kingdom of Civic compacts and CR-V sport-utility vehicles by 21,000 units.

Nissan Motor Co said last week that it would reduce its domestic production by an additional 72,000 units. Nissan had its credit rating cut one notch yesterday by Fitch Ratings, which cited its dependence on the weak United States market and an appreciation of the yen.