As in the USA and Europe, the car industry in Japan has felt the full force of the present recession.
Toyota Corp, Japanese largest company and the world's largest automaker, has been particularly hard hit.
This month, Toyota announced the closure of all 11 of its factories in Japan for a period of 11 days to reduce stocks of unsold vehicles. This move came after the company declared in December an annual operating loss (of US$1.7 billion) - the first-ever in its 70-year history. This unprecedented loss follows a record profit for the Aichi-based company only the previous year. 3,000 temporary workers are to lose their jobs this year in Japan, as the company moves to shed all its workers on fixed-term contracts.
The shockwaves have spread to Toyota factories overseas, with shifts being cut and job cuts threated in Europe, Thailand and the US with new manufacturing and research projects delayed or canceled. Domestic production in February and March will be halved compared with the same period last year.
Toyota is not alone among Japanese carmakers feeling the pain. Honda Motor Company, Japan's number two automaker, saw annual profits fall by 67% this year and will also reduce its non-regular workers in Japan to zero during 2009. Honda also pulled its team from Formula One due to the present economic downturn.
Nissan has already axed 1,200 jobs at its plant in Sunderland in the UK and will not renew the contracts of upto 2,500 temporary workers at its other overseas factories in Spain and the US.
Smaller Japanese producers Suzuki, Subaru and Daihatsu all announced substantial production cuts for the end of the financial year in March.
Related Japanese automotive industries are also suffering with Bridgestone, Japan's largest tire maker declaring falling profits on the year.
The "unprecedented crisis" in the automotive industry may get worse in what is looking like a brutal year for global car sales.
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Friday, January 23, 2009