February 6th, 2009
04:49 AM GMT
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TOYOTA CITY, Japan - On what was to be a historic day, halting all of Toyota's Japanese assembly lines, the automaker announced late in the day it would keep one line running. The late news sent copy editors and reporters to their laptops erasing headlines like "historic shutdown," but it did little to quell the pain for the tens of the thousands of workers idled across Japan as nearly every line stopped producing autos and auto-related equipment.

The scene is quiet these days in Toyota City.
The scene is quiet these days in Toyota City.

Nowhere is the silence more deafening than in Toyota City, home and birthplace to Toyota Motor Corporation. Factories are shuttered, workers idled, in an attempt to bring production in line with falling global demand.

The day is particularly ominous for assembly line worker Takayuki Yoshikawa, who has already been told he's out of a job and home in May. Yoshikawa resides in a Toyota owned dormitory. "I don't know what to do," says Yoshikawa. "I could go back to my hometown, but there are no jobs there, either."

Toyota, now the world's largest automaker, plans 10 more days like this, spread out over the next two months. Toyota's incoming president, Akio Toyoda, called the current economy "unprecedented, the likes of which haven't been seen in 100 years."

Toyota also says the scheduled assembly line shutdowns are an attempt to save what jobs the automaker can. "The production suspensions scheduled for Japan in February and March is part of our effort to keep production in line with market demand. We are carrying out these suspensions fully aware of the necessity to even out production volumes and maintain employment levels."

Analysts say while painful, these shutdowns may be unavoidable. "Everywhere, almost everywhere, things are getting worse and worse and worse," says Koji Endo, Credit Suisse auto analyst. "Under that kind of circumstance, you have to control your cost. Maybe try to shrink temporarily."

The cost control is having a damaging effect on Toyota City public coffers. The city of 400,000 estimates it will lose 90 percent of its tax dollars as Toyota falls into the red and pays fewer taxes. It comes at a time when Toyota City is seeing historic levels of unemployment. This region, according to Toyota City, carries the dubious distinction of having the highest rate of unemployment in Japan.

Alberto Dilone, already fired from a Toyota parts subsidiary, showed up at the Toyota City job center to search for a new job.

"Kubi," says Dilone, slicing a finger across his throat. Dilone says half the people in his plant have been fired and the jobs in Toyota City are scarce. Like the hundreds of unemployed filtering through the center everyday, he's leaving with no new job leads.

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soundoff (7 Responses)
  1. Gaurav Jain

    In this time of recession,isn't it a better option to reduce the wages of everyone in the hierarchy ,so that job loss could be avoided?

    February 6, 2009 at 7:10 am |
  2. Gaurav Jain

    In this time of recession,isn't it a better idea to reduce the pay scale of everyone in the hierarchy so that job loss could be avoided?
    Nevertheless reduced pay scale won't affect the spending caliber of an individual because due to job loss there is gap in demand and supply. This gap has pushed inflation rocketing downwards . So,the price of commodities have eventually decreased .And hence the reduced pay won't affect them eventually and we can also save job loss.

    February 6, 2009 at 7:18 am |
  3. Michael C. McHugh

    At the risk of repeating myself, this really is starting to look more and more like the 1930s every day. My historian's instinct told me this was true, but that doesn't mean I actually wanted to go through such a time personally. More and more, I'm starting to dwell on the political consequences of another Great Depression. Think of the kind of regimes that came to power in Germany and Japan back then. I'm not saying history will repeat itself that exactly, but I wouldn't want to take the chance. As Mr Churchill said, democracy is the worst form of government except for all the others that have been tried, although in my case I think social democracy is the best.

    February 6, 2009 at 2:28 pm |
  4. guest

    if a high profile country like Japan can't get out of economic troubles for 20 years then who can?

    They own most of the auto, electronic device brands that the whole world uses but there are millions of Japanese living in horrible conditions. Where is the problem? Where is the error? Can we just go and blame Japanese businesses and economists or is there an issue with the system?

    February 6, 2009 at 3:45 pm |
  5. Lauro Silva - Brazil

    That´s a vicious circle: people don´t buy cars until their confidence is recovered- their confidence is not recovered until unemployement stops- unemployement does not stop until people start up again buying cars. The stick in the mud magement style needs to be changed in the face of the mess and the laid-off working force needs to be financially assited as long as the crisis persists.

    February 6, 2009 at 5:42 pm |
  6. patrick

    Toyota has the right business model they dont lay-off workers.The us companies are trying so frantically to hold on to wealth they think if they cutting jobs will increase the bottom line. One question how is that working out for you?Mass ;ay-offs do more harm than good I fail to see what they are trying to accomplish.Billionaires are scared to become millonaires and millionaires are scared to become six figured what a shame holding on to greed on the way down.

    February 6, 2009 at 7:19 pm |
  7. Dilip Singh

    Hi Kyung,

    Its my pleasure that reading columns on you gives me the inside stories of Japan economies from time to time.

    After almost a gap of 4-5 months when the whole world is clapping and hugging on the news that worst is out and economy is back on track. All the Banks and manufacturing sectors are back.

    Can you share your inside expert views on the current situation thats been prevailing at TOYOTA City after the city had a worst of its kind situation till Jan – Feb of this year. Are Jobs back on track so is the assembly lines or whats the situation.

    Dilip Singh

    October 3, 2009 at 10:53 am |

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