Tokyo: Toyota Motor Corp, reeling from its worst US sales decline in more than a quarter of a century, will shut all its factories in Japan for 11 days as the global economic slump hits demand and company profits.
The news from the world’s biggest auto maker shows how the global crisis, likened to the Great Depression of the 1930s in its scope and severity, has spread from the US housing and banking sectors to threaten every part of the world economy. Governments and central banks have been working overtime to try to limit the fallout of the global crisis, flooding the financial system with cash, cutting interest rates and increasing spending.
South Korea said on Tuesday it aimed to create almost 142,000 jobs this year through infrastructure and environmental projects, part of a five-year, $38 billion plan to generate almost 1 million jobs.
Chile announced a $4 billion stimulus package based on public spending on infrastructure, subsidies and tax rebates.
“Facing this crisis will be the number one priority of my government this year,” said Chile’s president, Michelle Bachelet.
China, which relies on strong growth to create jobs for its millions of migrant workers and graduates, risks a wave a protests and riots in 2009 as rising unemployment stokes discontent, a state run magazine warned on Tuesday.
Researchers at the country’s central bank forecast China’s economy will probably grow by about 8% this year, in contrast to some analysts who predict a much sharper slowdown.
On Monday, US President-elect Barack Obama met with Republicans and Democrats in Congress seeking support for a stimulus package of up to $775 billion over two years, including hefty tax cuts.
CAR SALES SKID
But despite the best efforts of policymakers so far, economic indicators have been almost uniformly dire, with a 36% decline in US December auto sales the latest grim reading.
Led by sales drops of 53% at Chrysler LLC, 48% at Hyundai Motor and 37% at Toyota, the industry closed out its weakest year since 1992 in its largest single market.
Prospects for a quick recovery looked bleak.
Toyota, which saw its worst US monthly sales decline since at least 1980, said it would suspend operations at 12 vehicle and parts plants in Japan for six days next month and five in March in response to declining demand.
The cuts come on top of a three-day suspension at domestic plants this month and after the company warned two weeks ago that it would post its first-ever annual operating loss.
Stock markets, many of which suffered their worst year ever in 2008, have taken some heart from the raft of measures introduced in recent months.
Japan’s Nikkei average hit a two-month high and stocks elsewhere in the Asia-Pacific region rose for a seventh straight session on Tuesday.
MSCI’s All-Country World index has jumped 25% since hitting a five-year low in late November.
Prices for oil and industrial metals such as copper were also higher after racking up big falls in 2008 on worries about slumping demand.