Photo/Illutration Daihatsu Motor Kyushu Co.’s plant in Nakatsu, Oita Prefecture, is shut down on Dec. 25. (Shinjiro Sadamatsu)

RYUO, Shiga Prefecture--Embattled Daihatsu Motor Co. halted domestic vehicle assembly plants after admitting decades of fraudulent certification tests, alarming the municipalities, suppliers and workers that rely on the automaker as a lifeline. 

Vehicle production stopped at Daihatsu plants in Ryuo, Shiga Prefecture, and Oyamazaki, Kyoto Prefecture, and a subsidiary plant in Nakatsu, Oita Prefecture, on Dec. 25.

The company’s vehicle assembly operations came to a screeching halt when its plant in Ikeda, Osaka Prefecture, suspended production on Dec. 26.

The four plants, which together assembled about 930,000 vehicles in fiscal 2022, will remain idle at least until the end of January. It has not been decided when they will restart operations.

Factory workers will be assigned to desk work, cleaning and other duties during the daytime. Night-shift work will be suspended.

In Ryuo, a town of a little more than 10,000 residents, the Daihatsu plant employs about 4,000 full-time workers alone.

A company that supplies more than 90 percent of its products to Daihatsu has put more than half of its 1,000 or so employees on leave after it was notified on Dec. 20 that the Daihatsu plant would be shut down amid the scandal. 

“It is so difficult that we cannot see a path going forward,” a company official said. “We trust that (Daihatsu) will take steps to deal with the situation.”

Mayor Hideharu Nishida said on Dec. 25 that the town will soon start a consultation service on employment and other issues.

In fiscal 2021, the town started a program to loan a Daihatsu vehicle free of charge for three years to a family that gave birth to two or more children.

However, new applications have been put on hold.

“We have to ask (residents) to wait until shipments and production return to normal,” Nishida said.

Daihatsu Motor Kyushu Co.’s plant in Nakatsu, which employs about 4,200 workers, accounts for more than half of the Daihatsu group’s domestic vehicle production.

The city has a population of about 80,000. It receives about 20 percent of its corporate municipal tax revenues from automotive companies, including the Daihatsu subsidiary.

“The impact is substantial because (the company) has a broad base (of related industries),” a senior city official said. “We hope (Daihatsu) will straighten itself out.”

The Oita prefectural government on Dec. 25 started a consultation service for Daihatsu’s business partners and others affected.

According to credit researcher Teikoku Databank Ltd., 89 companies in the prefecture are directly or indirectly supplying parts and materials to Daihatsu Motor Kyushu, and revenues from related businesses are estimated to total 480 billion yen ($3.37 billion).

At a parts supplier whose transactions with the Daihatsu subsidiary accounts for 10-15 percent of its overall sales, seven workers were manufacturing parts for the company.

“We can reassign four of them to work for a different client, but the remaining three will become redundant,” a company official said. “If (the plant shutdown) becomes prolonged, we may have no choice but to ask them to take a leave of absence.”

A twentysomething regular employee at Daihatsu Motor Kyushu’s plant said, “I am feeling down. This is the first time I am going into a new year this way.”

Daihatsu said on Dec. 25 that the company has reached an agreement with its labor union over compensation for employee salaries due to the shutdown. Details were not disclosed.

The company will also purchase some of the parts that its 423 primary subcontractors were scheduled to deliver by the end of January as a form of compensation.

(This article was compiled from reports by Fuka Takei, Yuhei Nakahodo, Akina Nishi, Tomoki Miyasaka, Shinjiro Sadamatsu and Kenta Nakamura.)

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