Global News: Toyota Cuts Bonuses, Ford Cuts Europe Production, China Caps Fuel Prices, Russia Cuts Out Foreign Competition
March 17, 2009
In news from around the globe Monday, Toyota announced 50 percent bonus cuts for Japanese management, Ford is reducing output at several European plants, consumer gas prices in Shanghai rose to the government-limited maximum, and Chinese automaker Geely has halted production in Russia.
In Japan, Toyota Motor Corp. announced 50 percent bonus cuts that will affect nearly 9,000 management-level employees. This will likely be a bargaining chip during upcoming wage negotiations with labor union leaders. Recently Toyota has announced job sharing, wage cuts and bonus eliminations at locations all over the globe. Toyota anticipates its first-ever operating loss in fiscal 2008, which ends March 31.
Ford is further cutting production across Europe, but meanwhile is investing $260 million to expand capacity at one German plant. The Ford plant in Cologne, Germany, which is already operating at full capacity to assemble Fiesta and Fusion, will receive a cash infusion to manufacture 2.0-liter EcoBoost engines.
Meanwhile, Ford is cutting production at other plants in Germany, Spain and Romania while combating severe fallout in demand. "We are realigning not only our current production requirements but also our future sourcing plans to meet our business needs," said John Fleming, Ford of Europe chairman and CEO. "Ford of Europe must return to sustainable profitability as soon as possible. We will do whatever it takes to ensure the continuing viability of our business, and further actions can be expected."
In China, gas prices at most fuel stations in Shanghai spiked over the weekend to the government-imposed ceiling. Higher pump prices signal an end to promotional discounts offered by PetroChina and Sinopec in a price war that stemmed last December. The Chinese government controls fuel prices to limit their effect on inflation, but the country has experienced supply shortages and rationing in the past due to price limits squeezing PetroChina and Sinopec. Both companies are bound to world-market pricing for crude.
Russia has imposed a 35 percent import tax increase on auto parts to protect the domestic auto industry. The tax, issued in January, is scheduled to expire in nine months. One Chinese automaker, Geely Automobile Holdings Ltd., has responded by suspending production of Geely vehicles at a Russian facility owned by Ural Automobiles and Motors. Geely had been exporting preassembled vehicle sections to Russia for final assembly at Ural's factory, which now has capacity for 18,000 Geely vehicles per year. "We plan to resume production after the taxes expire nine months later," said Paul Chernavina, president of Ural Automobiles and Motors.
Photo by Ford
A worker at Ford's Cologne, Germany, plant assembles a Ford Fiesta.
Posted by Michelle Krebs at 4:10 AM under Business , Companies , Ford , Toyota | Comments (0) | digg this | Seed Newsvine
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