Major automakers slashing production

Twelve major Japanese automakers have cut their global output for fiscal 2008 by a total of 1.9 million units from their initial plans and slashed more than 14,000 factory jobs in Japan due to sluggish sales in major markets such as the U.S.

The reduced output amid the global financial crisis as well as the yen's rise represents about 7 percent to 8 percent of the overall levels of their original plans.

The sweeping reduction is expected to take a drastic toll on the economy as a whole, because the auto business is Japan's most important industry and its performance directly affects the future course of steel makers, parts makers, dealerships and other businesses.

The payroll cuts have been implemented at factories across Japan and are expected to deal a heavy blow to regional economies as well.

Toyota Motor Corp. has curtailed its production by a total of 953,000 units, mainly in Japan and the United States, revising its global output plan downward to some 7.92 million units, and the number of temporary workers at domestic factories is expected to plunge to 3,000 by March, about one-third of their number as of the January-March period this year.

Nissan Motor Co. plans to reduce its global production by more than 272,000 units and cut back on its temporary factory workforce to about 500 from 2,000, while Honda Motor Co. has decided to cut its production by 141,000 units and plans to terminate employment contracts for about 270 temporary workers at its Saitama plant at the end of December.

Major truck maker Isuzu Motors Ltd. has scaled down its domestic production by 28,000 units and will end contracts with 1,400 temporary workers at two plants in Japan at the end of the month.

"The domestic market has been bleaker than anticipated, and the recovery of the North American market cannot be expected soon," Isuzu Motors President Susumu Hosoi said earlier.

Automakers' bottom lines have already been hurt by surging prices for steel products, resins and other materials, and the global financial crisis, which deepened this fall, has further affected their performance.

Adding insult to injury, financial firms have been tightening their inspections on car loans, chilling demand in Asia, Russia and other emerging markets that had underpinned the Japanese makers' revenues.