Toyota may cut benefits of local executives

By Ma. Elisa P. Osorio, The Philippine Star

Posted at Feb 17 2009 02:53 AM | Updated as of Feb 18 2009 11:13 PM

Toyota Motor Philippines (TMP), the country’s largest automobile distributor, announced they are studying the possibility of cutting the benefits of local executives and freeze wages amidst the slowdown in vehicle demand.

“We are still in the process of evaluation. Right now we have no concrete plans yet,” TMP vice president Rommel T. Gutierrez told The STAR in a telephone interview yesterday.

Last week, Toyota in North America revealed pay cuts for factory executives and eliminated bonuses for all salaried production unit staff as US sales dropped 32 percent in January.

Gutierrez cleared that although the sales in January dropped, TMP is still confident of the prospects in the Philippine market.

He said they are in no hurry to make a decision because they have already implemented cost savings measures like the no overtime policy and the reduction in production. “We are not sure if there will be more.”

Toyota has already reduced their production of Innova and Vios, the two vehicles assembled in their Sta. Rosa plant, by 10 percent. The move was done as a result of the slowdown in consumer demand worldwide.

Angel Dimalanta, president of the Automotive Industrial Workers Alliance (AIWA) said Toyota has removed one shift every week. Instead of producing Vios and Innova on their Laguna plant, Dimalanta said workers were asked to do maintenance work.

Dimalanta said the Toyota Plant in Sta. Rosa operates five days a week. Each day is divided into two eight hour shifts. He said one of the Monday shift has been cancelled since mid January.

According to Dimalanta, a total of 40 units are being produced each shift or 20 units of Innova and 20 units of Vios.

Before the cancellation of one of the Monday shifts, Dimalanta said the plant produces 400 units per week. He said he does not know till when the reduced shift will last. “There is no definite date. It will be like this until the market improves,” he said. Target production for this year is 12,000 units.

When asked about the 10-percent reduction in production, Gutierrez said “our production continues with some rationalization of costs to manage our overhead.” Gutierrez refused to elaborate on the matter.

On the upside, Dimalanta said there is no retrenchment in Toyota. He estimated that Toyota has almost 1,500 workers. “At the moment, there are no retrenchments. In fact, we have recently regularized 95 line workers.”

“The union protects us. If there will be job losses the management will go first because they do not have a union,” Dimalanta added.