Toyota Motor Corp plans to replace its president after the Japanese carmaker forecast its first-ever operating loss, a report said yesterday.
The auto giant is considering moving vice president Akio Toyoda to the post, which is held by Katsuaki Watanabe, in April at the start of the next business year, the Asahi Shimbun reported.
Arrangements have been made to give Watanabe a more advisory role of vice chairman, the daily said without citing sources.
No official was immediately available at Toyota’s head office to comment on the report.
Toyoda, 52, a grandson of Toyota’s founder Kiichiro Toyoda, would be the first member of the family in 14 years to become president. Tatsuro Toyoda was the last president from the founder’s clan.
On Monday, Toyota said it expected an operating loss of ¥150 billion (US$1.69 billion) for the financial year to March, the first loss since it started reporting annual earnings in March 1941.
Last year it posted ¥2.27 trillion in operating profit.
Toyota said it still expected to make a profit on a net level but cut its forecast sharply to ¥50 billion, down from a previous estimate of ¥550 billion.
Toyota’s sharp cuts in forecasts marked a deepening of the woes plaguing the auto industry, which has seen General Motors and Chrysler, two of the US Big Three automakers, on the verge of collapse because of the global financial turmoil.
The worst US auto market since the early 1990s may force Toyota to do something that was once unthinkable: cut its North American payroll.
Asia’s largest automaker, which hasn’t shed workers in 24 years of building cars in the US, is exhausting options to trim costs after halting work on a Prius plant in Mississippi, idling a Texas truck factory for 15 weeks and planning to pare US and Canadian output next month.
“If we don’t see a rebound by the second half of next year, they’d probably have to consider layoffs,” said Haig Stoddard, an analyst at forecaster IHS Global Insight Inc in Troy, Michigan. “Toyota was expanding to catch up with demand. Now it’s got itself stuck with overcapacity for the first time.”
Job cuts can’t be ruled out as sales continue to fall, said Jim Wiseman, vice president of external affairs for Toyota’s North American production unit.
“We wouldn’t anticipate it getting to that point, but we never say never,” Wiseman said.
Toyota has 30,000 North American employees spread among 14 assembly, engine and parts plants, and vehicles built in the region made up 56 percent of US sales through last month.
The Toyota City, Japan-based company hasn’t cut full-time workers since 1950 in Japan, when it last posted an annual loss, though temporary jobs have been eliminated. Toyota adopted a lifetime employment policy after years of labor turmoil, said Jim Womack, chairman and founder of Lean Enterprise Institute in Brookline, Massachusetts.
“At the end of the day, you can be as paternalistic as you like, but if there’s no cash in the till, it all comes to an end,” said Womack, co-author of The Machine That Changed the World, a book about Toyota.