Toyota planning pay and production cuts in UK

London, March 11: Japanese auto manufacturer Toyota (NYSE: TM; TYO: 7203) looks likely to resort to stringent measures to enable it to withstand the economic crisis. The precariously placed behemoth intends not only to trim production, but also plans to initiate a fresh round of pay cuts for its workers.

Toyota has already warned of a first group-wide annual operating loss in its 70-year history. Globally, it has predicted a loss in excess of £3 billion. Its production is likely to register a double digit fall this year.

In the midst of plummeting demand for cars, manufacturers across the world have been trimming production and cutting jobs. Like other auto manufacturers, Toyota has also resorted to drastic cost cutting measures. Last week, Toyota cut 200 part-time jobs and also joined the list of companies which have started a voluntary redundancy scheme.

The world's largest automaker is now contemplating a four-day week and an ephemeral shutdown of its plants at Burnaston and Deeside. Some non-production weeks have also been planned for April.

A company spokesperson said of the measures being undertaken, “We have to reduce our costs further. Our employees recognize that and we are seeking agreement with the unions."

The bigwigs of London motor industry are scheduled to meet Ian Pearson, the Business Minister, to thrash out modalities whereby the auto makers meet the requirements for the £2.3 billion of loans.

Tony Woodley, joint leader of the Unite union, highlighted the urgent need of the government aid. He said, "We know the government has some good ideas about how to support manufacturing and the car industry through this recession.

“Our concern has been to ensure that we get this support, which is desperately needed right through the supply chain, out as fast as is humanly possible."

Though the Automotive Assistance Programme was announced by the UK government in January, till date, the carmakers and the suppliers have not received any funds or assistance from it.