Toyota puts the brakes on pay and production

Toyota is cutting pay and production at its UK factories by 10% - so its workers get Fridays off...

Last Updated: 06 Nov 2012

As carmakers meet with Lord Mandelson to discuss the government's £2.3bn bailout of the industry, approved last month by the EU, Toyota's UK employees will be strapping in for a rough ride. Cutbacks at the beleaguered Japanese giant will affect more than 4,000 workers at its factories in Burnaston near Derby and Deeside in north Wales, and will remain in place for a year.

The cuts are the latest in a series of manouevres by the carmaker to help it cope with the current economic pressure, which it reckons will see European sales drop 30% this year. Having already shut down for two ‘non-production' weeks and introduced a voluntary redundancy scheme, last week Toyota was even talking about bringing in a three-day week. However, a spokesperson said today that the 10% cut in pay and hours it was implementing would add up to a 38-hour week, which means having a Friday off every fortnight. That might sound appealing, but it's not as much fun come the end of the month when your pay-cheque comes in lighter.

Yet it's clear that some evasive action had to be taken. Toyota expects the first group-wide annual operating loss in its 70-year history - more than £3bn - and reckons its production will fall by 12% this year. The carmaker decided to cut pay and production following negotiations with unions and employees, who it said recognised the need to cut costs. If the figures didn't make it clear enough, when the unions are agreeing to pay cuts, you know you're in trouble.

The Japanese firm is, of course, not alone. Nissan is cutting 1,200 jobs in Sunderland, Honda is suspending production in Swindon, and BMW has cut 850 positions at its Mini plant in Oxford. Faced with the prospect of the wheels falling off the British car industry completely, carmakers want the UK to back its financial support with a programme to encourage motorists to scrap their cars and buy newer ones. At times of crisis, it seems such concepts as ‘sustainability' get kicked to the kerb.

In today's bulletin:
Government stumps up £27m for Jaguar Land Rover
Toyota puts the brakes on pay and production
Roger Parry: Where Johnston Press went wrong
City suffers from Cattles' offal year
Do it right: Seven ways to clinch deals in a downturn

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