Toyota feels the pinch of the world economic turmoil

TOYOTA, the world's biggest car company, yesterday laid bare the extent of the global financial crisis when it warned that it was expecting to make its first full-year loss since the Second World War- the evidence that the global economic meltdown, not strategic mistakes, is the primary reason behind turmoil in the U.S. automotive industry.

"This is not an issue where the Japanese are doing fine and the domestic automakers are struggling," said Aaron Bragman, automotive analyst for HIS Global Insight in Troy. "This is an issue where everyone is struggling."
In last financial year, Toyota had an operating profit of ¥2.27 trillion (£17 billion) but now is projecting an operating loss of $1.7 billion, 150 billion yen, for its fiscal year ending March 31, and it slashed its global vehicle sales forecast by 700,000 cars, 8.5 percent fewer than the previous year. The UK has seen even more severe falls of Toyota vehicles, down 11 per cent in a year.

According to the Times, Toyota could cut up to 800 jobs in the UK, or 15% of its workforce, adding to the 40,000 positions expected to be shed from the UK car industry's 200,000 total over the next three years.

The Times said declining demand was "likely" to trigger redundancies across Toyota's business.

The car maker has not made any of its permanent staff redundant, but it is understood to have already cut an unspecified number of temporary workers.

Toyota promised to do all it could to retain permanent British workers, but has reportedly not ruled out the possibility of redundancies.