Toyota lifted companywide restrictions on overtime

Article by Christian A., on September 28, 2010

The latest indicator that Toyota Motor Corp. is indeed recovering is the lifting of companywide restrictions on overtime that were imposed during the global financial crisis.

It was in December 2008 that Toyota established the guidelines to minimize overtime. This was around the time that Toyota was preparing to post its first operating loss in seven decades.

Initially, Toyota cut down overtime to 10 hours each month for every worker but in June 2009, it ended all overtime. However, Toyota was lenient with this policy and after-hours work was permitted in certain periods such as in coping with the orders for the Prius hybrid.

Aside from Toyota, other Japanese companies have also started to bring back longer hours. Toyota estimates that its operating profit will more than double to $3.72 billion in the current fiscal year, which ends March 31, 2010. Increasing overtime is expected to bring back mentoring for workers with less experience.

Toyota spokesman Paul Nolasco said that when overtime hours were limited, experienced workers tended to focus only on their tasks and did not spend any time to teach new workers. About 60,000 office and factory workers in Japan were affected by the overtime restrictions.

Toyota declined to reveal its savings as a result of the decision to restrict and eventually end all overtime. [via autonews - sub. requried]

Topics: toyota

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