Toyota, Harley-Davidson plan major work force, production cu

Toyota Motor Corp is allegedly mulling cuts of up to 1,000 jobs in North America and Britain, while Harley-Davidson Inc. plans to close plants and axe 1,100 jobs – about 12% of the company’s total workforce – as shoppers stop buying cars and the pressure to cut fixed costs mounts amid an unprecedented auto industry downturn.

The Toyota announcement comes just days after Tuesday's announcement that Akio Toyoda, the grandson of the company’s founder, would take over as the next president of the world’s largest auto maker. It has already been reported that the 52-year-old Toyoda plans to replace most of Toyota’s top executives when he officially takes over as president in June, and clearly has his work cut out for him with the company frantically tries to cut production as sales plummet towards Toyota’s first ever operating loss in 71 years of business.

During those 71 years, Toyota has for the most part avoided major reductions of regular staff, but now, faced with the loss, Toyota is considering going beyond cutting temporary and contract staff to easing out regular employees in Britain and North America. The cuts would be made through early retirement and other voluntary programs – involuntary cuts are not alleged to be part of the plans. The official decision on job reductions and possible pay cuts may come as early as next week.

Harley-Davidson also reported an operating loss, with its fourth-quarter net income falling 58% to $77 million (34 cents a share) from $168.1 million (78 cents a share) one year prior. Worldwide retail sales of Harley’s motorcycles have fallen, and the company plans to slash its motorcycle production as much as 13% in 2009 from already reduced 2008 levels.

The 1,100 jobs to be cut over 2009 and 2010 include about 800 hourly production positions. Harley said most of the layoffs would occur this year.

--Posted by Steven Schiff, Vault News & Commentary