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A Deep Scar Left After Toyota Suspends Production in 12
Plants Including Stopping Construction of Prius Plant in
USA |
Kathy A. Penrose
Contributing Journalist
AllAmericanHybrid.com
kathy@allamericanhybrid.com
Toyota has announced
that it will suspend production in all 12 of its Japanese plants
for 11 days over February and March 2009. The last time Toyota
had to do such a thing was back in 1993, but that was for just 1
day. The company had previously decided, last year, to stop
production in the 12 plants for only 3 days, but that changed
due to the economic situation.
Toyota is coping with
the slump in global sales. Hidaeki Homma, the Toyota spokesman,
said that the “Demand in the world auto market is so depressed
that every model is falling sharply in sales.”
With the global
situation that the automakers are facing even the foreign
companies have to lower production, delay new models, and cut
their staff. Toyota sales in Japan fell to 3.2 million
vehicles in 2007, the lowest in 34 years.
In December, Toyota
said that it was falling into its first operating loss in 70
years, expecting a $1.66 billion loss for its fiscal year ending
in March 2009, this compared to a $25.2 billion profit in 2008.
Thanks to its outside dividend income, Toyota said that it would
still post a small net profit of $555 million, down from earlier
year earnings of $18.89 billion.
The in-process plans to
build a partnership with the state of Mississippi have been put
on hold. The state of Mississippi put an incentive program
together totaling
$293.9 million for the project, which includes the site and site
preparation, already completed, infrastructure improvements, in
progress, and job training and recruitment incentives, also in
progress. As a result of the Toyota project, Mississippi
anticipated state tax revenues of roughly $235 million from the
facility over the first 10 years of operations. The total
investment of state taxpayer funds was to be $579 million with a
return of $693 million over 25 years. (ref. Mississippi
Development Authority) The hold on construction brings the
anticipated payback for the state’s existing taxpayer investment
in Toyota into question as Toyota has not stated when they will
continue the project. The plant was to produce the Toyota Prius
which has seen a 48% drop in North American sales in November,
2008. Toyota stated that it will continue to pay the salaries
of the workers that it has already hired (ref. reuters).
Earlier this week,
Toyota said that its U.S. sales in December were down 37 percent
a worse drop than Ford at 32 percent and GM at 31 percent.
Toyota President Katsuaki Watanabe told reporters that, "I
never expected the crisis to spread this fast and leave this
deep a scar. “
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