Toyota downturn puts workers out on the streets

A growing number of auto workers are winding up on the streets in and around Toyota City in central Japan as the global downturn sends the world's biggest carmaker plunging into the red.

Toyota Motor Corp (7203.T), which on Friday reported its first-ever annual group operating loss and forecast a much larger than expected loss for the year ahead, has been battered by a slump in demand for cars. [ID:nT285085]

That has forced it and its subcontractor factories to lay off thousands of contract workers since late last year.

Many of these workers have lost their homes as well because they often live in company dormitories that they must vacate when their contracts are terminated.

Toyota's business affects every industry in this area. When Toyota decided to reduce production levels, many related companies and factories were forced to cut jobs as well, said Hiroshi Matsumoto, leader of a volunteer group in nearby Nagoya City.

The number of homeless people who line up every night at a soup kitchen organised by one such group in Nagoya has nearly doubled to as many as 400 since late last year.

Toyota has gone from rapid expansion to overcapacity almost overnight: Its operating loss for 2008/09 comes just a year after it recorded its largest ever profit.

The downturn in its fortunes has turned the lives of some of its former subcontractors upside-down almost as fast.

When I was a contract worker, I managed to get meals. Now I can't even get meals, so it's hard, said 29-year-old Hiroki Hasebe, a former local auto industry worker who was fired in March and has since been sleeping in parks.

Another former assembly line worker, Akira Yoshino, 31, remains feeling bitter after he and his colleagues were kicked out of their dormitory rooms after getting fired last month.