BANGKOK: In a clear sign of the country’s economic woes, Japanese carmaker Toyota Motor Thailand has launched a voluntary redundancy program, aiming to shed 800 workers.
According to Phuphal Samata, president of Toyota Thailand Workers’ Union, the program has been offered to contract workers, who account for 40 percent of the 16,477 employees at Toyota’s manufacturing facility in Thailand.
Those seeking redundancy are allowed to register for the scheme until July 9. They will get compensation in accordance with the labor law, a 16-day bonus and a 30-day extra payment.
The program will take effect on July 13.
However, according to Phuphal, Toyota pledged to re-employ those employees in their same positions within a year.
“The company attributes the program largely to the depressed condition of Thailand’s automotive industry, which has been hit by the first-time car buyer scheme and the poor global economy,” he said.
“After the tax-rebate program expired in 2012, Toyota has been trying hard to adjust its manufacturing to cope with the sluggish sentiment.”
Toyota’s current production is only 60 percent to 70 percent of total productivity.
Although Toyota’s popular Hilux Revo pickup truck made its world debut last year, domestic sales remain tepid.
Founded in 1962 with registered capital of 7.52 billion baht, Toyota Motor Thailand runs three plants in two provinces. The plant in Samrong, Samut Prakan produces pickup trucks and other commercial vehicles. The two plants in Chachoengsao—at Ban Pho and Gateway—make passenger cars.
The three plants have a combined maximum capacity of 760,000 units a year.
Toyota reported its sales for the first five months totaled 87,715 vehicles, down by 13.4 percent from the same period last year.
The company projected its whole-year sales to fall by 9.8 percent from last year to 240,000 vehicles, marking the fourth successive year of declining sales. It is scheduled to cut its sales forecast at a press conference on July 26.
Toyota posted its highest-ever Thai sales in 2012 at 516,086 vehicles, a 78 percent rise from 2011. Sales decreased by 13.7 percent to 445,464 in 2013 and shrank by 26.6 percent to 327,027 in 2014.
It reported sales of 266,005 vehicles last year, down by 18.7 percent.
It exported 376,763 vehicles to more than 100 countries, down by 12 percent in a second consecutive year of contraction.
Toyota expects to ship 370,000 vehicles this year, down slightly by 1.8 percent.
A high-ranking Toyota executive who asked not to be named said the company needed to launch the redundancy program because the condition of the three plants was pretty bad. Not only have domestic sales shrunk, but the global situation has become more fragile after Brexit.
“Toyota has relocated employees among the three plants over the past two to three years to implement economies of scale and has slowed down production time to let every worker have a job to do,” the source said.