Page 66 - Toyota Under Fire

THE OIL CRISIS AND THE GREA T RECESSION

It’s important to note that Toyota does not guarantee its em-
ployees lifetime employment. The promise that the company
makes is that all employees are highly valued and respected. That
respect means that the company will exhaust all other reason-
able possibilities before it lays off a nontemporary employee. One
unusual step that Toyota took in reaction to the recession was
to offer voluntary separation agreements in the United States—
although only after designing a plan to make sure that the em-
ployees’ choices were truly voluntary. In the end, an estimated
1,200 out of roughly 18,000 eligible employees accepted volun-
tary separation (less than 7 percent).

TOYOTA, LAYOFFS, AND NUMMI
NUMMI, Inc. was never legally a Toyota plant; it was Toyota’s
first North American automotive assembly plant, but it was
formed as a 50-50 joint venture corporation with General Mo-
tors. When General Motors reorganized in bankruptcy, the firm
decided to abandon NUMMI. Toyota offered GM everything it
could think of to maintain its stake in NUMMI, including build-
ing a version of the Tacoma as a GM brand, but to no avail.
Toyota was left on the hook for the entire operation and had
to decide whether to increase its investment to cover the loss
of GM’s investment or to close NUMMI. Atsushi Niimi, a board
member and head of global manufacturing, explains the back-
ground to Toyota’s decision:

NUMMI’s operation was almost never profitable but,
rather, collected just enough money to release the next
model. It is just like a bicycle which needs to be [moving]
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