Toyota (TM) forced to lay off workers in response to U.S. market

Over the past year, automakers have struggled to deal with the tough economic conditions in North America, especially the United States. One of the companies that has been able to handle the slowdown better than its peers has been Toyota (NYSE: TM). But the effects are being felt even by the Japanese automaker, as made clear today in the news that the company is laying off 800 workers in one of its Japanese plants.

The 800 workers that are being laid off represent about 10% of the workforce at the company's plant in southwestern Japan. So far, the company has been able to sidestep the steep losses that its American rivals have been forced to deal with, but this year is proving to be a bit tougher, as the company is now predicting a first annual drop in profit, which would be the first time in the past seven years that the company has seen profit fall.

Toyota has been more fortunate than many automakers, mostly due the fact that the company has a long history of building smaller, more fuel efficient cars. This fact alone has helped it weather the slowdown that record high gasoline prices in the U.S. have helped create. Last Friday, however, the company stated that sales dropped 18.7% in July from the same period last year.

But even as strong as Toyota has been, this year is going to be hard on the Japanese automaker, and the predicted drop in profit has led the company to reduce the number of vehicles that it plans to produce, thus leading to these 800 layoffs. Of the 800 layoffs, 350 were cut in June, and another 450 got the news last month.

Toyota did state that it plans to increase the number of jobs again towards the end of this year, as the company tries to figure out a new production level to fit the current market. The plant where these current layoffs took place produced around 430,000 vehicles, including models such as the Lexus RX and Highlander sport utility vehicles.

When the company raises employees levels later this year, expect the added resources to be used more in factories that produce the company's most fuel efficient cars. This is an area where Toyota excels but has been having a hard time keeping up with the fierce demand for these cars.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

Toyota to layoff 200 temp workers at truck plant

Toyota Tundra plant to lay off temp workers, slow production
June 17, 2008: 07:01 PM EST

NEW YORK (Associated Press) - Toyota Motor Corp. on Tuesday told 200 temporary workers at its full-size truck plant here they will be laid off this summer.

The company will also slow production at its Tundra plant, scheduling 14 days between now and October when no trucks will roll off the assembly lines. Those days, workers will be allowed to take vacation, days without pay or work at the plant on non-manufacturing duties as they choose, said Toyota spokesman Mike Goss.

The temporary workers were hired at the plant with hopes of becoming permanent employees as other workers left, but they will instead be returned to the agency that helped hire them, Goss said.

"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," said Goss, who noted record-high gas prices and a slowing economy have badly damaged truck sales.

The layoffs announced Tuesday do not affect the company's permanent work force of 2,000 at the San Antonio plant that opened in November 2006. At full capacity, the plant can produce 200,000 trucks a year.

It's not clear how the layoffs or slowed production might affect the 21 onsite suppliers that make parts for the Toyota Tundra plant. Those companies employ another 2,000 workers. Top of page