Toyota Australia Announces Layoffs, Production Cuts

Toyota Australia will lay off up to 100 employees and curtail production, citing a drop in export orders.

President and CEO Max Yasuda says the voluntary layoffs at the 2,500-worker Altona plant will be accompanied by a rollback in daily output from 470 units to 431. The workforce and production cuts will take place at the end of the month.

Toyota says the exact number of layoffs will be based on the number of applications received and the skill-set of those employees. There will be no compulsory redundancies.

Exports make up about 70% of Toyota Australia's production volume, with the automaker expected to build about 104,000 Camry, Camry Hybrid and Aurion sedans this year.

Just a week earlier, Federal Industry Minister Ian Macfarlane during a visit to Toyota Australia congratulated the automaker on the strength of its export program.

“It's great to see a company that is so enthusiastic about staying in Australia, and making cars in Australia,” a transcript of his news conference quotes him as saying.

The Australian Associated Press says the latest cost cuts will allow Toyota Australia to proceed with facelifts on its current models as it seeks approval from its Japanese parent company for the next generation of locally manufactured cars.

Yasuda says deciding to cut workers and production was difficult, but it is vital if the automaker wants to move toward global competiveness.

“As a manufacturer we are subject to fluctuating orders from our domestic and export markets, so we need to have the flexibility to respond to changes in conditions,” he says in a statement.

Yasuda makes it clear he is under orders from the Japanese parent to begin working to improve its long-term manufacturing viability in Australia.

“We need to reduce the cost of each of our locally built vehicles by A$3,800 ($3,620),” he says. “Although we have made progress, we are now seeing gaps in our plans that must be closed to secure investment for the next-generation vehicle and to maintain our export program.”

Toyota Australia is awaiting the parent company’s approval to continue its manufacturing operations in Australia beyond 2017, when the next-generation models are due to be released.

‟This decision-making process has started, so we must show our parent company that we are not only achieving our targets, but that we have the relevant plans in place to achieve them right up until 2018,” Yasuda says.

"This is why everyone at Toyota Australia is working incredibly hard to find new plans and initiatives to contribute to achieving our targets.”

The move by Toyota comes after Ford announced it is ending production in Australia in 2016 after 90 years and GM Holden says its local production is in doubt.

Macfarlane said during his visits to automakers that he is committed to the industry.

“More importantly, I am committed to those people...whose livelihoods, and their mortgages and their school fees and all the things they have to pay to keep their households going, depend on Australia making vehicles here,” he said.

Melbourne’s The Age newspaper reports Toyota Australia has foreshadowed further restructuring across its manufacturing business, including likely job losses and changes to its parts-sourcing process, under a strict cost-cutting directive from its global parent.

Toyota Australia Executive Vice President and CEO David Buttner tells the newspaper the automaker will need to make more changes to how it operates its business.

“So far in this calendar year, we’re on track to achieving our targets,” he says. “However, we have to look to the future and, frankly, some gaps are starting to emerge in our plans for the remaining years” leading up to 2018.

“We are benchmarking our (Georgetown, KY) Camry plant, which is seen as the (most efficient) manufacturing plant in the globe,” Buttner says. “We just have to focus on transforming our business, reducing our cost base and ensuring that we have policies and processes that make us globally competitive.”

Buttner says Toyota is looking for savings companywide. “Our transformation process is not just restricted to manufacturing,” he says. “It involves every arm of our business, whether it be sales or administration.”

“We’re laying the foundations for our future growth, and when you’re laying the foundations that means you want to build something on top of it. We have a very strong desire to continue to build cars in this country.”