Toyota Motor, the Japanese auto giant, announced Monday that it expected the first loss in 70 years in its core vehicle-making business, underscoring how the economic crisis is spreading across the global auto industry.
From their President:
“The change in the world economy is of a magnitude that comes once every hundred years,” Toyota's president, Katsuaki Watanabe, told a news conference in Nagoya, Japan, near the company's Toyota City headquarters. “We are facing an unprecedented emergency.”
Mr. Watanabe said the company would respond by suspending investment in new plants, including the delay in starting a factory in Mississippi announced last week, and moving some production lines to single shifts. The company has even unplugged electric hand dryers at some offices in an effort to cut costs.
Toyota has been letting go temporary workers, but has held tight in not laying off full-time staff. As the article points out, Toyota has quite cash cushion ($18B) to ride out slow times. They aren't a charity…. how long will they hold on to employees in factories that aren't producing vehicles?
This will be interesting to follow. Will Toyota continue to focus on the long-term during these challenging times? This news is hardly a repudiation of the Toyota Production System. It just goes to show that TPS/Lean is not a cure-all for any business.
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