Toyota Faces Production Halts in Tijuana Over Labor Gaps

Toyota has faced production interruptions at its Tijuana plant in Mexico, resulting in a total of 19 non-operational days in February and March. These disruptions were primarily due to labor shortages affecting local suppliers, as reported by Reuters.

"Toyota's North American plants continue to face intermittent production delays due to supply chain disruptions," stated a spokesperson from Toyota North America. "Our teams are working diligently to minimize the impact and lessen the inconvenience to our customers."

The Tijuana plant, which produces the Tacoma pickup truck, was impacted not only by labor shortages but also by technical issues, according to two sources. These problems led to prolonged production stoppages. Documents from Toyota and its suppliers, reviewed by Reuters, confirm the details of these interruptions.

In a letter sent to its North American supplier network in late April, Toyota acknowledged these frequent production halts, describing them as causes for "inconvenience and concern." The letter requested detailed information from parts makers regarding their specific challenges and the support they require.

"Employees are frequently changing jobs in search of higher salaries. It has become difficult to secure personnel, and we can no longer maintain the required production volume," said a source working at a supplier.

Despite these challenges, Toyota continues to collaborate with some suppliers to alleviate the strain. However, many parts manufacturers are still struggling to maintain production due to the persistent worker shortage.

The supply chain issues have impacted Toyota's operations in North America, where the company recently reported a JPY 27.5 billion (US$176 million) operating loss for the January-March period. This was despite the automaker achieving record earnings overall.

"There were operational issues involving parts makers, and it became clear in the fourth quarter that production was not going as expected," said Yoichi Miyazaki, Chief Financial Officer, Toyota. He also mentioned that the automaker incurred one-time costs related to production changes.

Electric Vehicle Production Delay

In addition to the supply chain disruptions, Toyota is also dealing with the fallout from a safety test certification scandal at its subsidiary, Daihatsu, and governance issues at two other group companies. These scandals have prompted the automaker to delay the start of its electric vehicle (EV) production in the United States by six months, now scheduled for around June 2026.

Despite the production setbacks, the company expects to start selling a hybrid version of the Tacoma in the United States this year, catering to the growing demand for hybrid vehicles. Last year, Toyota sold over 230,000 Tacoma units in the United States, accounting for about 10% of its total sales in the market, with only the RAV4 and Camry achieving higher sales figures.

Toyota has forecast a 20% decline in profits for the current financial year, attributing this to ongoing investments in suppliers and strategic initiatives.