Toyota is struggling to sell trucks and SUVs like everyone else, but unlike the competition, no full-time workers from stalled factories are getting laid off. The 4,500 workers at idled plants are instead bettering themselves through eduction by taking classes on safety, diversity, and Toyota history. They're also doing community service while on the clock and even some gardening. The workers will be learning how to work faster and smarter during the down time, and are even being shifted to busier plants on a temporary basis to help plants that are working beyond capacity to keep up with demand. Toyota's plan to keep its workers busy at all costs isn't cheap, as about $50 million is being spent to keep workers busy with training programs. Of course, you can't please everyone and the plan isn't sitting well with all of Toyota's workforce, as workers at running factories don't like the fact that laid off workers are getting a leg up on training. A more skilled plant could have an advantage over others in getting earmarked for future products, so unaffected workers also want the extra training. While expensive and a bit of a logistics nightmare, Toyota's plan is a good one if you can afford it. It should help create a more loyal, better trained workforce that also forges ties with the surrounding community. We bet Toyota hopes it will prevent any talk of unionizing, as well. And with Toyota's record profits over the past few years, $50 million is a drop in the corporate bucket.
For white collar workers that still work at the Ford Motor Company: congratulations, you've officially made the cut. Ford's President of the Americas, Mark Fields, announced at a media event that the Blue Oval has successfully achieved its targeted cuts, at least for now. Fields told reporters that Ford would "continue to look at our structure and evaluate that versus the external environment," which is fancy executive talk for "if we don't start making some money, we'll cut some more." Fields didn't reveal the exact number of cuts that were made to achieve that goal.
Ford announced in June that it would cut 15% of its salary-related costs in an effort to become more lean and conserve cash during the brutal automotive downturn. Ford is trying to conserve enough Bennies to pay for its ambitious powertrain plans that will be needed to help the Dearborn, MI automaker offer the fuel efficient vehicles customers want. Fields said that spending on engines and transmissions over the next couple years will be "unprecedented," and that Ecoboost, diesels, hybrids, and other fuel-saving technologies will get the lion's share of the spending. Ford also plans to convert three truck and SUV factories to small car production and add six European models to its product mix.
Sinking sales at its Lexus luxury division have prompted Toyota to lay off some 800 workers at a Japanese plant where certain Lexus models are assembled. All 800 workers were temporary hires provided by an outside agency, and Toyota claims that at least 500 of the temps will be brought back at some point in the future. It seems that Toyota, along with other Japanese automakers, are increasingly using these temporary workers so that they can more easily adjust their payroll to changing market conditions. This tactic has drawn the ire of many in Japan, a country where loyalty is seen as extremely important. In total, Toyota's daily sales rate dropped by 18% last month while Lexus saw an even larger 25% fall, by far the largest of all the major Japanese brands.
General Motors is looking to reduce its salaried (read: non-unionized) workforce by 5,000 employees by the end of the year, leaving the beleaguered automaker with 27,000 white-collar jobs in total. This 15% head-count reduction is part of an ongoing effort to trim costs as the automaker continues to hemorrhage cash.
Also on the docket are early retirement plans offered to a select group of workers close to retirement age, while employees who choose to stay won't be getting raises until 2010 at the earliest. If GM reaches its reduction goals, the automaker will have shed its salaried workforce by 17,000 people in the last decade alone.
FOLLOW UP: Tony Cervone, a GM spokesperson, has told Bloomberg that HUMMER is the only brand the General is considering selling or closing.
The Wall Street Journal is reporting that General Motors is looking to cut thousands of white-collar jobs and sell, or stop production, of some if its brands. The General has supposedly set 2010 as a target for its return to profitability, but the automaker has never announced any details on how it plans to achieve that goal.
GM's management team will be meeting with the board early next month to discuss raising additional cash, and that could mean seriously pruning GM's bloated brand portfolio. HUMMER is supposedly already on the block, but Chevrolet and Cadillac – brands at the core of GM's business – are likely safe from the ax. However, Buick, Pontiac, Saab and Saturn, which haven't fared well during the biggest U.S. sales slump in 15 years, could possibly be sold or killed completely.
While it deserves note that all of this information comes from unnamed WSJ sources, GM's recent stock plunge and abysmal June sales numbers means something has to be done, and quick. If that entails cutting underperforming brands, so be it -- nostalgia be damned.
The full-size pickup truck woes continue to worsen, leaving even mighty Toyota little choice but to slow production of its Tundra model. In fact, Toyota's brand new plant in San Antonio that was built just for the Tundra will be shutting down a total of 14 days between now and October. Full-time workers at the plant will be able to use vacation days, take the time off unpaid or find something else at the plant to do while the assembly line is halted.
Unfortunately, temp-to-hire workers aren't so lucky. Two-hundred employees who were hoping to land full-time positions at the plant will be laid off this summer. Toyota spokesman Mike Goss says, "We have a very long-term view of that factory in Texas. We're trying not to overreact. We're trying not to shut it down." Whoa... back up. Shut it down? We hadn't heard any such thing until it was spoken by Goss. Sounds like things are just as bad for Toyotas with beds as they are for pickups from Detroit.
Suzuki's sales in the United States have been at historically high levels the last two years. Both 2006 and 2007 saw American Suzuki Motor Corporation move more than 100,000 units – a big feat for a little brand in the U.S during these tough economic times. Despite that seemingly good news, Rick Suzuki, president of ASMC, has called the performance dismal and is stepping down in an act of seppuku. The record performance is looked upon so unfavorably because it falls far short of goals laid out by Suzuki in 2003 as part of a five-year plan to eventually sell 200,000 automobiles. Financially, ASMC is taking losses, so Suzuki has put into place a buyout plan that is expected to aid in trimming 55 jobs out of its 674-strong U.S. workforce. Employees who do stay on can expect no bonus or raise this year.
Perhaps Suzuki was caught up in irrational exuberance back in 2003 and set some overly-ambitious targets. Its automotive product line has a certain appeal, and the unveiling of the Kizashi 3 at the New York Auto Show has us excited for what's soon to come from Suzuki. Here's hoping the brand doesn't go the way of Isuzu in the U.S.
Blame the plunging greenback. Less than a week after BMW announced the expansion of their U.S. Spartanburg plant, we are getting news from Germany that the weak dollar is making it increasingly difficult for the German automaker to keep production on their soil and that layoffs are imminent. Ernst Baumann, BMW's head of personnel, said 5,600 jobs in Germany will be cut by the end of the year. When you add that to the 2,500 positions already eliminated, the total represents about 7.6-percent of BMW's workforce.
While the layoffs are bad news for German factory workers, the flip side of the coin may benefit their American counterparts. With the value of the Euro sitting at more than $1.50 at current exchange rates, European automakers are finding manufacturing on U.S. soil more attractive (read that "cost effective") than ever. BMW manufactured about 155,000 vehicle on U.S. soil last year. By 2012, that number is planned to approach 240,000 cars. BMW sales worldwide reached 198,628 in January and February, up from 191,357 the same period last year. With the new BMW 1 Series and BMW X6 models hitting showrooms in 2008, BMW is forecasting yet another year of increased sales.
It was late 2005 when Nissan announced it was packing up operations in Southern California and moving to Tennessee. If you didn't choose to move east of the Mississippi, and many didn't, you were looking elsewhere for a new job. Some of the lucky few who dodged the axe worked for Nissan Design America, the North American design team split between sites in Farmington Hills, MI and San Diego, CA. Now, it seems those workers may have lost their immunity, too.
Citing streamlining in the automotive design process, Nissan execs are saying they just don't need the size staff they required in the past. Where it used to take four years to design a new model, now it just takes half as long and a smaller group of employees can readily manage the shorter design cycle. If there is a bright side to this news, it is that the layoff is quite small for the automobile industry--less than one dozen employees are expected to take the voluntary severance package.
