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Honda reducing Japan jobs as it trims production

autos Updated: Jan 16, 2009 15:58 IST

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Honda Motor Co announced on Friday another round of job cuts in Japan as it trims production by thousands of vehicles to cope with a global drop in auto demand.

Japan's No. 2 automaker said the decision to cut 3,100 jobs will slash to zero the number of temporary workers at its plants by the end of April. It had already reduced its temporary work force by 1,200.

Major Japanese automakers are under pressure not to layoff full-fledged workers because this nation's corporate culture encourages lifetime employment. Instead, they have relied on cuts to their large temporary work forces to adjust to lower demand. Honda also announced on Friday it was slashing production in Japan by an additional 56,000 vehicles amid a global slump. The automaker, which employs 185,000 people globally, now plans to produce 1.168 million vehicles in Japan for the fiscal year ending March, down from its initial plan of 1.31 million vehicles.

The global financial crisis and the damage from a surging yen have taken their toll on Tokyo-based Honda, which makes the Odyssey minivan and Accord sedan, along with other Japanese automakers. Nissan Motor Co is also reducing its temporary work force to zero by the end of March from some 2,000 people last year. Toyota Motor Corp, Japan's top automaker, is cutting its temporary work force in Japan from 6,000 to about 3,000 in the aftermath of the global financial crisis.

It is unclear how Honda and Nissan hope to adjust their work force if demand drops further.

The plight of the thousands of temporary employees who have lost their jobs, not only in the auto industry but other sectors, has drawn scrutiny of the companies involved and public sympathy. Some live in company dormitories and lose this accommodation when their contracts aren't renewed.

Hundreds who had become homeless came for free meals, shelter in tents, job-counseling and medical checkups offered by volunteers in a Tokyo park during the New Year's holidays.