Toyota in talks with union for pay cut during halt

Toyota Motor Corp., Japan’s biggest automaker, is asking workers to accept a lower pay while it extends a domestic production halt to cope with the plummeting demand for new automobiles.

The company needs to pay at least 60 per cent of the average full salary, as provided in the law, Toyota spokesman Keisuke Kirimoto said in a telephone interview. Nikkei English News earlier reported the possible pay reduction.

“The management and union are in negotiation about the size of the pay cut, in accordance with labour law,” he said. Toyota, which expects its first operating loss in 71 years, is cutting production, as its sales last month plunged 37 per cent in the US and 18 per cent in Japan.

The Toyota City, Japan-based company said yesterday it will suspend production at 12 domestic factories for 11 days in February and March, as the global recession saps car demand.

The company last month cut its sales forecast by 8.5 per cent to 7.54 million vehicles for the year ending March 31. The extended production cut may reduce Toyota’s production by about 200,000 units, according to Koji Endo, an analyst at Credit Suisse Securities (Japan) Ltd.

Toyota, maker of the Prius hybrid, in November cut its domestic production forecast by 8.6 per cent to 3.85 million vehicles for the year ending March 31.