Leo Lewis, Asia Business Correspondent
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Toyota, the Japanese car giant, has been forced into suspending production at a number of factories in the face of chilling economic data, the strong yen and rapidly collapsing global car markets.
In a rare move which appears likely to be repeated in a similar form across much of the struggling Japanese automotive industry, the Nagoya-based giant said that all 12 of its Japanese manufacturing facilities would go dark for a total of 11 days between February and March.
By Toyota’s own admission, the move is designed to save permanent staff jobs amid fears that huge swathes of once booming industrial Japan are on the brink of turning very bleak indeed.
Industry insiders told The Times that 11 days – divided into two periods – represents effectively the longest time that a major car plant can be suspended: any longer, and the weight of fixed costs starts demanding permanent closures and more radical assaults on workforce numbers.
Toyota has already announced layoff plans that will hit its considerable staff of temporary workers, but in common with many large Japanese firms, the company has been desperate to avoid the social and political condemnation that would likely follow the announcement of big cuts among its permanent staff.
“Japan’s famous “job for life” corporate culture may have been eroded beyond recognition over the last few years, but none of the country’s biggest brand names wants to be the first one to permanently sound its death knell,” said one former senior executive of Mitsubishi Motors.
Toyota’s plant suspensions are also expected to send a nasty shudder throughout the local economy of Nagoya, where hundreds of car part and component makers have based their operations to be close to the world’s most successful car maker. The central Japanese city’s prosperity and importance as an export hub has been almost entirely driven by Toyota’s growth.
The Toyota factory suspensions come as inventories of unsold cars have built-up to unprecedented levels around the world: Japanese docksides are now jammed with vast expanses of unsold cars as demand slumps everywhere. Auto sales in the US plunged 36 per cent in the month of December despite ever more enticing incentives and purchase terms.
In Japan, meanwhile, car sales have fallen to their lowest levels since the early 1970s in a trend of decline that began well before the global economy tumbled into crisis.
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