Toyota profits hit speed bump

Watanabe and other Toyota executives repeated a recent announcement that expansion plans will be on hold, including a new plant in Mississippi and projects in India.

Toyota said there were no plans to lay off any full-time employees, though it plans to cut the number of temporary workers at its Japanese plants in half to about 3,000.

Toyota is a relatively old-style Japanese company that offers lifetime employment, and only in recent years has hired and let go of temporary workers to adjust production. It said it was reviewing overseas jobs but had not reached a decision.

Watanabe vowed Toyota would grow so lean it would realize profitability even if its worldwide sales fall as low as 7 million vehicles — what he called the basic "bottom line" for Toyota.

"We must change to become more slim, muscular and flexible," he said.

The automaker will focus on hybrids and small cars, and invest in ecological technology to prepare for long-term growth, officials said.

While Japan's automakers are in far better financial shape than their cash-strapped American counterparts, the global slowdown is hitting them hard. Last week, Japan's No. automaker, Honda Motor Co., also lowered profit and sales forecasts and declined to give a vehicle sales goal for 2009.

Monday marks the second time Toyota reduced its forecast. Initially, it had projected net profit of 1.25 trillion yen ($13.9 billion) for the fiscal year, but last month lowered that to 550 billion yen ($6.1 billion).

Also Monday, it lowered its revenue forecast to 21.5 trillion yen ($239 billion), down about 18 percent from a year earlier.

Toyota's U.S. vehicles sales plunged by a third on year in November, when overall sales fell to their lowest level in more than 26 years. And there is little hope for a quick fix as consumers hold back big purchases amid a credit crunch, rising unemployment and fears about the future.

More on Toyota  |  Prius

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