Even though Toyota Motor Corp touts its mighty Tundra pickup as “the truck that's changing it all,” workers who build it in San Antonio are not immune from the threat of layoffs that have beset the Big Three US automakers.
Opening the $1.2 billion plant in San Antonio in early 2007 was part of Toyota's public relations campaign to displace big US truck makers like Ford, Chevy and Dodge in Texas, the world's largest market for full-sized pickup trucks.
But Toyota's timing in San Antonio could hardly have been worse.
In 2008, US gasoline prices hit $4 a gallon, triggering a sharp drop in demand for gas-guzzling trucks like the Tundra. Toyota can produce nearly 200,000 Tundras a year in San Antonio, but North American sales fell to 137,000 in 2008 from 196,000 in 2007.
As US automakers shut down plants and clamor for government funds in the face of a sharp drop in vehicle sales and a deepening recession, Toyota, the world's No. 1 automaker, is resisting job cuts for its 1,900 workers in San Antonio, instead reducing the workweek in the hopes sales will pick up.
But as Toyota faces its first corporate loss in its 70-year history, the automaker for the first time is offering buyouts to 18,000 of its US workers in an attempt to thin its factory workforce voluntarily.
Worries about layoffs, which have cost 140,000 jobs at factories operated by US automakers since 2005, also hang over San Antonio and “Toyota towns” in Indiana and Kentucky.
San Antonio attorney Julian Castro, a former City Council member who helped lure Toyota in 2003 to the Texas city of 1.3 million people, said he was “terribly concerned” the company might decide to cut jobs at the plant.
With the drop in Tundra sales, Toyota last week unveiled its 2010 Tundra, which can be fitted with a smaller, more fuel-efficient V8 engine.
“When the heat is on, failure ain’t an option,” the announcer says in a Tundra ad titled “Super Heat” that debuted during the 2009 Super Bowl.
After constructing two US factories to build the Tundra, Toyota later this year will shift Tundra production from its Indiana plant to San Antonio and consolidate all production of the vehicle there.
San Antonio workers in November wrapped up a three-month production halt, where they drew full pay even while the plant was idled.
San Antonio plant worker Lori Williams remains upbeat.
“We're very positive,” Williams said. “Everybody here is very glad they are not getting laid off. That's pretty much across the board.”
Toyota is on track to post an operating loss of $4.95 billion for the year ending March 31, its first-ever group-wide operating loss.
The company last week announced a series of measures designed to confront the worst automotive slump in decades.
The measures, which will apply to San Antonio and other US assembly plants and parts operations in Indiana, Alabama, Missouri and West Virginia, include cutting salaried employee bonuses, slashing executive pay by as much as 30% and cutting pay for some factory workers by 10% by reducing hours.
“We hope the new measures will help us adjust while protecting jobs,” said Jim Wiseman, vice president of external affairs for Toyota's North America unit.
The vast majority of Toyota's 25,000 factory workers in North America are not represented by a union and attempts by the United Auto Workers to organize the automaker's factories have hit a wall.
General Motors Corp is seeking concessions from the UAW and creditors under the terms of its $13.4 billion federal bailout and faces a Tuesday deadline to submit a restructuring plan to US officials showing how it can cut costs and pay back the loans.
Last week, GM said it would cut 10,000 salaried jobs and is offering buyouts to some 22,000 of its factory workers.
Facing the same Tuesday deadline, GM's smaller rival Chrysler LLC was locked in nonstop negotiations with the UAW. (Reuters)