Toyota taking another look at production plans amidst global disruptions

Thursday, 10 March 2022

Toyota’s efforts at ramping up output are being hindered by mounting global disruptions, forcing the company to take another look at its production plans.

'We need to examine the conditions before us,' President Akio Toyoda told union leaders, according to a publication posted to the company's website Wednesday seen by Automotive News. 'If we do not continue to make sound production plans' along with suppliers, 'this will lead to exhaustion.'

Those disruptions include ongoing supply issues, Covid outbreaks, a cyberattack, and the conflict in Ukraine.

Toyota is re-evaluating its production plans amidst global disruption.

The cyberattack knocked out all of Toyota’s Japanese plants offline for a day last week, hampering its plan to assemble 950,000 new vehicles in March, up nearly 100,000 from the same month in 2021.

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Demand for Toyota vehicles remains high, but Toyota has been forced to cut its output goal for the 2021 fiscal year.

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Toyota cut its output goal for the fiscal year ending in March down to 8.5 million units, a drop from nine million. That goal is still the same, but Toyota is aiming for a more “realistic” production plan for the period between April and June of this year.

More details on that front will be released at a later date, Chief Human Resources Officer, Masanori Kuwata, said.

'We learned first hand, during times like major recalls, the importance of prioritizing safety and quality above all else and not neglecting the people supporting us on the ground,' Toyoda said. 'Together with suppliers and dealers, we want to work together to overcome the current crisis situation.'

Toyota also confirmed that it will meet the union demand for an annual salary and bonus hike.

'I'd like to thank all those unionists who did the utmost for the future of the auto industry despite uncertainty on the outlook amid the coronavirus and a chip shortage,' a Toyota labour union official quoted the president as telling a meeting between labour and management, according to Reuters.

'We will pay salary and bonuses in line with their demands,' he added, confirming the union's demand was fully met during the third round of the talks for 2022.

Honda and Nissan also followed suit, as a way to push a cycle of wage growth and private demand, helping stoke the local economy.