Toyota Shuts Down All Japanese Production Except for One Line

By Chris Haak

02.05.2009

As previously planned, Toyota Motor Corporation has ceased production at every plant in Japan with the exception of leaving a single production line running, as it struggles to keep new vehicle inventory in line with global selling rates.  The company plans to implement 10 more Japan-wide production shutdowns over the next two months with the same goal of reducing output so that sales might catch up with inventory levels.

The company commented that “the production suspensions scheduled for Japan in February and March are part of our effort to keep production in line with market demand,” and added, “we are carrying out these suspensions fully aware of the necessity to even out production volumes and maintain employment levels.”

The appropriately-named Toyota City (a city of 400,000 located approximately 150 miles southwest of Tokyo) is the location of Toyota’s global headquarters, and has seen rising unemployment as the global automobile market collapses.  Toyota City depends so heavily on Toyota that it expects nearly 90% of its tax revenues will evaporate as Toyota posts losses and has to pay less money as corporate taxes.

It’s a strange parallel world where Toyota is halting production, idling workers, and seeing the economy of their home base suffer – you know, sort of like Michigan has been seeing for the past half decade.  And, just like we’re seeing in the US domestic auto industry, reduced production volumes result in financial distress and layoffs in the supplier network (GM’s first quarter production plan is to produce less than half as many vehicles as it did in the first quarter of 2008).

News like this not only emphasizes the global scale of this severe recession, but also shows that the phenomenon of collapsing sales is not happening only to GM, Ford, and Chrysler in the US.  The difference is, those three companies were already operating in a weakened condition because of substandard products, poor marketing, and a cost structure that assumed the three companies had 75%+ of the new-vehicle market, when they are now under 50%.  The good news is that the companies have finally come to terms with this reality and know they will never have the kind of market share they had before, so are aligning their capacity more closely with their true place in the marketplace.  The bad news is that the euphemistic “capacity reduction” means shuttered factories, bankrupt suppliers, and tens of thousands of employees out of work.

COPYRIGHT Autosavant – All Rights Reserved

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

Share This Post On

7 Comments

  1. Guess its time to get Godzilla to rampage through Toyota city then everyone can find work cleaning up the mess.

  2. Dude, who is editing your stuff? The sentence fragments are killing me. Try writing fewer compound sentences. I don’t see one sentence that isn’t compound. Its hard to read.

  3. Jeez, tough crowd here. Are they fragments or compound? They can’t be both. On the second-last paragraph, I needed to change two words and a dash to make it more readable.

    I’ll try to go easy on the compound sentences. My mind tends to combine thoughts; what can I say? Think about how ridiculous the above article would sound with only simple sentences. By the way, look harder. The last sentence is not compound.

  4. Looks readable to me. Sheesh.

  5. And what is that single production line still producing?

  6. Ouch. You know it’s bad when even Toyota has to cut production to one line. As a Michigander, I feel for those workers-we know what they’re going through.

    BTW, I thought the article was well-written. I guess Mark would prefer the first paragraph to read more like this:

    “Toyota Motor Corporation has ceased production. This cessation is at every plant in Japan. A single production line, however, was left running. The production stop was previously planned. Toyota struggles to keep new vehicle inventory in line with global selling rates. The company plans to implement 10 more Japan-wide production shutdowns over the next two months. Toyota’s goal is to reduce car output. It wants to reduce output so sales can catch up with inventory levels.”

    A bit dry, although you could have fun turning it into a Gertrude Stein tribute.

  7. Anonymous, I couldn’t find any info on which line was still running. It was only a preplanned single-day event, but still unprecedented for Toyota.

Submit a Comment

Your email address will not be published.