Toyota ($NYSE:TM) Executive Vice President for North America Bob Carter gave a cool outlook to United States Toyota dealers regarding looming 5% tariffs on Mexico that could ramp up to a staggering 25% in October.
Toyota is heavily invested in Mexico: it planned to deliver about 246,000 Tacoma trucks this year, with 160,000 of those assembled in Tijuana and the rest in San Antonio, Texas.
A dark spectre looming over all of this is the fact that Toyota has reduced job openings in the United States by as much as 62% since June 30, 2017.
Over the past two years, the number of Toyota job openings in the United States was halved. In San Antonio, Toyota listed less than double-digit openings for that factory. Those San Antonio positions were mainly for Skilled Team Members (factory workers), Body Seibi Production Technician (bodywelders), and a Project Lead Analyst.
In San Antonio, there were multiple weeks without a single job posting, as indicated by date gaps when following along the data in the above chart.
Toyota already warned investors in its annual 10-K that vehicle sales in the U.S. are a big driver for profits, and "changes in import fees or tariffs on raw materials or imported vehicles" could affect sales. As seen through its careers page, the company hasn't built up enough human capital in San Antonio to shift the majority of Tacoma truck production from Tijuana to Texas in time for tariffs.
And it's unfair to blame them given the company's relationship with the Trump administration; just last month, the company felt "not welcomed" in America after Trump proclaimed that some auto imports are a threat to national security. Furthermore, year-to-date sales of Toyota vehicles in America has dropped 3.6% from January to May, but that was due to lagging car and SUV sales, while the Tacoma model saw a 7.9% increase within an overall drop. That all may change, though, if the imported Tacomas from Mexico come with a 5% — or more — tariff slapped onto it.
That's also not even mentioning its employee count on LinkedIn; from December 31, 2017 up until today, the Toyota Motor Corporation saw a 500 person employee count drop on LinkedIn. While this may be Toyota auditing its presence on the social media platform, it also means there has not been an increase in users saying they work for the company, a sign that it may be reducing workforce overhead quietly.
Although the company is investing $13 billion in U.S. operations over the next several years, job listings and LinkedIn data shows that it wasn't hiring too much for its secondary Tacoma factory, and if Mexico can't cut a deal, it may cost Toyota and its investors.