Clearly, Toyota has big problems. According to AP, Toyota is slashing bonus pay for managers as the Japanese automaker tackles a massive recall in the U.S. and deep losses for the second straight fiscal year.
Toyota announced in the U.S. on Wednesday a massive recall affecting 4 million vehicles to replace the gas pedals that can get stuck in the floor mats and cause sudden acceleration.
This is one of the worst moment for an automaker to make recalls. And Toyota’s recall is the largest!
Toyota’s top executives and board have already given up their bonus pay.
The cuts for managers follow a 60 percent year-on-year decline for their summer bonus this year, and a 10 percent cut for their winter bonus in 2008.
The bonuses for union workers have also been cut. Their winter bonus will average 930,000 yen ($10,700) this year, down 18 percent from the previous year, according to Toyota.
The cost of the U.S. recall is expected to be significant because of the sheer number of vehicles.
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