Toyota, Honda take steps at home to deal with sales slump

TOKYO — Toyota and Honda are starting to feel the pinch of the global slowdown at home.

On Thursday, Japan's biggest automaker said it was suspending production at a third plant later this month as it tries to cope with falling demand in the U.S. and around the world.

Toyota Motor Hokkaido Inc., a major subsidiary that makes engine transmissions, will stop all its assembly lines Dec. 25, company spokesman Harutoshi Fukasawa said. Of work stoppages at the plant in the past 15 years, this will be the first to be caused by falling production.

The plant, located on Japan's northern island, makes automatic transmissions and other parts, mostly for the Corolla compact exported to the U.S., where Toyota's sales plunged more than 30 percent in November.

The news came a day after Toyota said two other plants will temporarily suspend some production.

"Japanese auto demand was already bad, but now U.S. demand is falling and the situation is extremely difficult," Fukasawa said, adding some lines will also be stopped on Saturdays in December.

Additional plant closings might be needed in months ahead if U.S. troubles continue, he said.

Meanwhile, Japan's No. 2 automaker Honda Motor Co. said Thursday it is cutting jobs in Japan because of plunging auto demand.

Honda is reducing 760 temporary workers, or nearly 18 percent of its domestic temporary work force of 4,300, at four plants, including one motorcycle plant, this month and next month, said company spokesman Hideto Maehara.

It has also offered an early retirement package for workers at its plant in Britain, although the number of workers to be cut has not been disclosed.

Honda, whose U.S. sales last month tumbled 32 percent, declined to say how the job reductions will affect vehicle production plans.

The U.S. recession, set off by the credit crisis earlier this year, is battering sales at Japanese automakers, which until recently had been weathering higher gasoline prices and the global slowdown better than their money-losing American rivals.

On Wednesday, Toyota Motor Corp. said it will suspend production of Lexus luxury models at its Tahara plant in central Japan, and output of all vehicles at its Miyata plant in southwestern Japan on Dec. 24 and 25. Christmas is not a holiday in Japan.

The Miyata plant, which makes Lexus cars, Kluger sports utility vehicles and Harrier hybrids, is run by subsidiary Toyota Motor Kyushu Inc., spokesman Toshiaki Hori said.