Toyota is offering voluntary buyouts to its employees in Princeton and other plants throughout North America.
It's the company's latest attempt to cope with falling sales without resorting to layoffs. Kelly Dillon, a Toyota spokeswoman, said the buyouts are just one of several measures the company told plant workers of today.
"All of these actions are consistent with our overall philosophy of making every effort to protect jobs during this downturn," she said.
Toyota has not set a target on how many employees it hopes take the buyouts, Dillon said. About 4,500 people work at the Princeton plant.
"We do not expect large numbers to participate," she said.
Those who take the buyouts will receive a lump sum of $20,000 and an amount equal to 10 weeks of their base pay. After that they will get two weeks of base pay for every year they have worked.
Along with the buyouts, workers in Princeton will start working 72 hours in a two-week period, rather than the usual 80. The new schedule will begin in April.
All Princeton employees will see their compensation reduced in some way or another. Those on salaries will receive no bonuses in 2009. The total compensation of executives will be reduced by between 25 and 30 percent.
Production workers will not see their wages raised during the year. The same workers will get a bonus in May but likely not again for more than a year afterward.
In a final step, Toyota will allow salaried employees to take time off without pay. The same offer was earlier extended to those on wages.
Greg Wathen, president and chief executive officer of Economic Development Coalition of Southwestern Indiana, said he was relieved to learn the plans do not call for job losses.
"It speaks well for them as a company, because they could just as easily say we are going to do layoffs," he said. "No one likes to hear the news, but they have acted in a very responsible manner to minimize the pain."
He noted that several other car manufacturers have found layoffs unavoidable. Earlier this week, General Motors, under pressure to show federal lawmakers that it has reformed itself, announced it would cut 10,000 positions. And Nissan recently announced plans to lay off about 20,000 workers, most of them in Japan.
Toyota has suffered from the same fallen demand seen by those companies. Earlier this month, it raised its expected operating loss for its business year, ending in March, from 150 billion yen to 450 billion yen, or about $4.9 billion.
The Princeton plant has taken a number of steps to help Toyota cope with its troubles. In 2007, it parted ways with about 370 temporary employees who had worked there.
Last year, Toyota began to schedule nonproduction days, or days when workers would still come to the plant but not make any vehicles. They instead went through training meant to improve safety and quality at the plant.
Those actions were followed by a three-month shutdown of the Princeton West Plant - where the Tundra pickup truck and Sequoia sport utility vehicle were made - between August and November. The production of the Tundra was later concentrated in San Antonio, Texas.
During that shutdown, Princeton employees continued coming to work and going through the training programs. The same was the case when Toyota scheduled nonproduction days for the East Plant, where the Sienna minivan is made.
Through it all, one beacon of hope has been the promised arrival of the Highlander SUV, which the Princeton is to begin making in the fall this year.
Dillon said the Princeton plant may have to schedule additional nonproduction days for April. The company has also put a freeze on hiring and halted most expenditures on capital, with the exception of the new equipment needed to build the Highlander.
In early 2008, the Princeton plant had been hit especially hard as the high price of gasoline depressed the demand for the large vehicles made there. Now, gas is cheap again and the slump is affecting all makes of automobiles, said David Cole, chairman of the Center for Automotive Research.
"A huge factor is a lack of availability of credit," he said. "If you can't get credit, you can't buy anything."