Eight major domestic carmakers are set to implement a large-scale production adjustment, suspending productions at some plants nationwide, following a slump in demand amid the new coronavirus global pandemic.
The automakers will inevitably experience a severe blow to business performances and employment, with some of their overseas factories partially suspending operations.
Toyota Motor Corp. has suspended production at its two plants in Aichi Prefecture and partially shut down production lines at its three plants in Tokyo, Aichi and Fukuoka prefectures.
Honda Motor Co. announced it plans to halt operations at its Sayama factory in Saitama prefecture on April 16 and 17.
Nissan Motor Co. will intermittently stop production at its three domestic plants through May 1.
Suzuki Motor Corp., Mazda Motor Corp., Subaru Corp., Mitsubishi Motors Corp. and Daihatsu Motor Co. also said they will halt productions at their domestic factories.
Similar moves to adjust production are expected to affect auto parts manufacturers as well.
The automobile sector is an industry with a truly wide support base that includes parts makers and car dealers.
According to Tokyo Shoko Research Ltd., the number to first-tier suppliers of the automakers except Daihatsu is 17,812, and second-tier suppliers, 34,354.
Toyota Boshoku Corp. on Friday partially started suspending production lines that produce auto seats and interior items at its eight domestic factories, mainly in Aichi Prefecture.
It made the decision following the Toyota's move to adjust its production, with some of its factories halting operations until April 14.
Jtekt Corp. has moved from a two-shift system to just one on its domestic production line.
Denso Corp. has maintained operations at its domestic factories, but said production revisions have already begun on certain products.
Each automaker plans to pay salaries to employees during the time operations are suspended.
Though Toyota has encouraged its employees to use paid vacation time, but those who choose not to can report to work and perform other duties such as cleaning and odd jobs or review production lines at plants.
Concern, however, is being expressed among some employees about future salary payments.
Toyota's Tsutsumi Plant in Toyota, Aichi Prefecture, decided to halt all its production lines, a stoppage that started on Friday and runs through Tuesday.
"There's a chance the company could halt production for a longer period at some point in the future. I wonder if our salaries will continue being paid as they have been," said a male factory employee in his 40s.
Toyota, Honda and Mazda have been putting on hold the recruitment of fixed-term plant workers.
Nippon Steel Corp., which supplies steel materials to automakers, also began considering putting workers on temporary leave.
The automakers' decision came as their new-car sales globally dropped because of the spread of the virus.
Toyota has been halting the recruitment of fixed-term workers since February, and Mazda has been doing the same since November.
It is the first time for Toyota to have months-long hiring freezes since 2012.
Honda is suspending job interviews of fixed-term workers to prevent the virus from spreading, according to sources.
About 2,500 fixed-term staffers are currently working at automaker giant Toyota.
After the expiration of their three- to six-month contracts, the agreement is expected to be renewed so they can work at plants for a maximum of two years 11 months.
Should the decline in new-car sales be prolonged, it will require a certain amount time for firms to again start accepting new applicants, observers said.
Nippon Steel is now in talks with its labor union on plans to have workers take temporary leave about twice a month, sources said.
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