Toyota retail giant JM Family dismisses 500 employees, cuts pay
Moves hit Southeast Toyota, finance units
Kathy Jackson Automotive News March 5, 2009 - 7:53 pm ET
LOS ANGELES -- JM Family Enterprises Inc., owner of the distributor that accounts for 16 percent of Toyota sales in the United States, has dismissed 500 employees because of the shrinking auto market.
The cuts, amounting to 11 percent of the work force, spread across Southeast Toyota Distributors as well as JM Family's finance and insurance units, President Colin Brown said in a statement today. He said the organization was geared for a U.S. industry selling 16 million vehicles annually and is now realigning for a market of 10 million to 12 million.
"Given these unprecedented challenges, we have had to make some of the toughest decisions in the history of our company," Brown said.
JM Family was founded by the late Jim Moran in 1969. In addition to independent distributor Southeast Toyota, other primary subsidiaries of the Deerfield Beach, Fla., giant include World Omni Financial Corp., which provides retail and wholesale financing for dealers; JM&A Group, a provider of finance and insurance products to dealers; and JM Lexus, the largest Lexus store in the country in Margate, Fla.
Salary cuts, hiring freeze
U.S. sales industrywide averaged 16.4 million this decade through
2008. Last year's total was 13.2 million. Most analyst and company forecasts for 2009 are within JM's projected 10 million to 12 million range as tight credit and record-low consumer confidence deepen the recession.The JM Family cuts include 110 voluntary separation packages offered to employees at vehicle-processing centers and parts warehouse in Jacksonville, Fla., and Commerce, Ga. Salaries will be reduced for most remaining employees.
Brown said the cutbacks would have been steeper had the company not taken earlier steps to reduce costs. They include a hiring freeze, reduced contributions for retirement plans, and suspension of all merit increases and annual bonuses.
Southeast Toyota is the world's largest independent distributor of Toyotas. It comprises 173 dealers in Alabama, Florida, Georgia, and North and South Carolina.
According to Toyota spokeswoman Zoe Zeigler, Southeast Toyota was the No. 1 ranking sales region in the country through February, accounting for about 16 percent of all Toyota Division sales. Through February, Toyota-brand sales in the United States were down 35.3 percent as the overall market plunged 39.4 percent.