TORONTO (CP) -- Toyota Canada is cutting production and executive salaries as well as freezing wages as part of the global car company's drive to cut costs in the current auto crisis.
Ray Tanguay, president of Toyota Motor Manufacturing Canada, said the company is making the cuts in lieu of handing out layoff notices to any of its 5,000 staff at two plants in southwestern Ontario.
In a statement Thursday, Toyota Canada said it is "taking strong measures to protect permanent jobs and navigate the current economic storm."
While full-time staff will be spared, Tanguay said contract workers won't have their employment renewed.
As well, the company is halting capital spending, cancelling overtime and cutting executive salaries. It also is freezing wages "for the foreseeable future."
The company will also cut production by slowing the speed of its assembly lines "to match production to market demand" over the coming weeks and months, Tanguay said.
"These are careful step-by-step strategies that protect our jobs, and we believe that Toyota in North America and TMMC will emerge stronger," Tanguay said, citing "the worst economic recession since the Depression in the 1930s."
Employees in Canada have been waiting for word on how they will be impacted after parent Toyota recently forecast its first annual net loss since 1950, citing the plunging demand for cars, especially in the U.S.
Toyota, which in recent years has been crowned the world's best-selling car company, also lowered its global vehicle sales forecast for the fiscal year by 220,000 from its December forecast to 7.32 million.
Toyota has two plants in Canada located in Woodstock and Cambridge, Ont.
The Woodstock plant, which employs about 1,200 people, began producing the RAV4 sports-utility vehicle in December.
In the fall, Toyota delayed the startup of a planned second shift at the Woodstock plant, which would have added another 800 staff.
Toyota Canada also said last month that its two plants will face some non-production days from January until April.