Business and Finance

Toyota Motor Corp offered buyouts to some 18,000 U.S. workers and said it would cut pay for executives and blue-collar workers in North America, and an analyst warned it may soon cut working hours in Japan.

The world’s No.1 automaker, struggling as the global credit crunch sends auto sales sliding, said it would shut down production for more days in April at plants in the United States, Canada and Mexico and would cut executive pay and bonuses.

“The global economy is in a once-in-a-century situation … Nobody knows if these steps will be enough given the uncertain outlook,” said Shotaro Noguchi, an analyst at Mitsubishi UFJ Securities.

“Inventory levels are still high, and a recovery in demand is not in sight yet. Toyota may have to adopt work-sharing in Japan in line with production cuts, at the same time as reducing overtime work.”

The cost-cutting underscores how the world’s top automaker and a perennial blue chip in a notoriously volatile sector is struggling amid the worst auto slump in decades.

Toyota said the North American moves were intended to keep as many of its North American workers on the payroll as possible.

“We hope the new measures will help us adjust while protecting jobs,” Toyota Motor Engineering and Manufacturing Vice President Jim Wiseman said.

Toyota is on track to post an operating loss of some $4.95 billion for the year to March 31, the first group-wide operating loss in its 70-year history payday loan companies.

Shares of the world’s largest carmaker ended flat on Friday, underperforming a 0.5 percent rise in Tokyo’s transport equipment subindex.

Noguchi said Toyota’s North American announcement detailed previously disclosed plans to cut costs by 500 billion yen ($5.5 billion) in the year from April 1.

Toyota said on February 6 it would slash fixed costs, including labor and other costs, by 10 percent in the year to March 2010, partly by reviewing employment terms globally.

SLIDING SALES

The automaker has cut North American production of top-selling cars such as the Camry and Corolla after sales in the United States, its largest market, fell 15 percent in 2008.

It has also suspended work on a new plant in Mississippi that was due to produce its Prius hybrid car beginning in 2010. Rivals Honda Motor Co Ltd and Nissan Motor Co Ltd have also been forced to cut output.

Toyota said the buyout program would not be offered at two plants where its workers are unionized.

Those are the joint venture manufacturing operation it has in California with General Motors Corp and a truck assembly plant in Tijuana, Mexico. 

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