American car manufacturer’s Ford, General Motors, and Chrysler have taken some lumps lately for the bailout requests and their “unsustainable” union work forces. The GOP has taken delight in Detroit’s plight, while simultaneously lavishing praise on the foreign automakers and their predominantly Southern state, non-unionized US workforce.
With that in mind, it should come as a shock that Toyota and Nissan, the GOP’s darlings, are really hurting too in these tough economic times. So much so, in fact, that Toyota has offered buyouts to over half of its US workforce (Business Week):
Toyota Takes the Knife to US Labor Costs
With sales in the doldrums, Toyota is offering buyouts to 18,000 U.S. workers, reducing wages, and slashing bonuses. But no layoffs so far
Last summer, when Toyota (TM) temporarily shuttered three U.S. plants as part of a move to build more fuel-efficient vehicles and fewer large trucks, it won plaudits for not laying off employees. Instead, workers undertook extra training sessions, helped out at other plants, or even became involved in projects in the local community. Now, though, with the U.S. market showing few signs of recovery—Toyota’s sales slumped 32% in January—and losses mounting, the Japanese automaker has no choice but to cut labor costs in the U.S. While no layoffs are planned, Toyota is offering buyouts to some of its 30,000 American employees, slashing bonuses, and cutting executive pay.
According to a statement issued late on Feb. 12, Toyota will offer voluntary exit programs and work-sharing schemes at selected plants. Worker bonuses will be reduced and there will be no wage increases “for the foreseeable future.” Executives will have their pay cut and see their bonuses disappear. There will be additional nonproduction days in April, too. “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,” Jim Wiseman, vice-president for external affairs at Toyota Motor Engineering & Manufacturing North America, said in the statement.
Toyota says it is unsure how many workers will take up the offer of the buyouts and that it doesn’t have a target in mind. Workers that sign up for the voluntary plan will get 10 weeks’ salary, plus two weeks’ salary for every year worked, and $20,000. The offer will be made to 18,000 U.S. Toyota workers, but unionized plants, such as New United Motor Manufacturing, a joint venture with GM (GM) in California, will not be affected.
I suck at math, but if all 18,000 workers take the buyout (they won’t–but lets say they do) that would be 60% of Toyota’s US workforce gone. When an automaker is ready to cut 60% of its workforce. . .that doesn’t bode well for the plants themselves–and kind of debunks the GOP meme that Detroit’s unions are responsible for all the Big 3’s problems.
Japan’s protected their markets and their automakers since they began rebuilding the country after WWII. South Korea (Hyundai) does the same. Don’t even get me started about China. It would be stupid if we didn’t do the same, especially when our guys have finally seen the light and started making some pretty darn good cars. Let Citibank and Bank of America die–other banks will buy their good paper, but save GM, Ford, and Chrysler.