Toyota Cutting Executive Salaries and Offering Buyouts
Toyota Motor Corp. has decided to further cut North American production, cut executive compensation by 30% and offer buyouts to 18,000 workers. This is in light of the slumping economy that has hit car manufactures hard.
"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 in a statement.
Starting in April, Toyota will cut production days in some US factories as well as shorten the work week by approximately four hours. These new measures will affect assembly plants in Indiana, Kentucky, and Texas. Auto-parts factories in Alabama, Missouri and West Virginia will also feel the affects.
The 30% pay drop for executives will result in a 5% salary cut and the elimination of bonuses.
Toyota does not expect that many workers will take the buyout offer which consists of 10 weeks of pay, plus two weeks of pay for every year worked plus $20,000.These buyouts will not be offered in Canada, Mexico or unionized plants in the US.
Toyota is expecting its first annual net loss since 1950 but still prides itself on not implementing any lay-offs, unlike Nissan who is expected to cut 20,000 jobs world wide by 2010. Plunging consumer demand in the US and a strong Yen is to blame for Toyotas recent financial woes.