The main purpose of this paper is to examine changes in labor force structure and labor management policies of Toyota Motor Corporation. Toyota has established the so-called Toyota Production System based on the long-term employment of full-time production workers and their acquisition of firm-specific skills as well as on cooperative labor-management relations. Toyota, however, has increased the number of non-typical production workers since 2000. Their number increased from 1,100 in 1998 to 9,800 in May 2004. One of the main reasons for management to increase non-typical workers is to cut labor cost. Toyota management anticipated an intensification of market competition as a result of the shrinkage in the size of domestic markets. Toyota management, however, was concerned that the drastic substitution of non-typical workers for full-time workers would lead to a decline in the quality of firm-specific skills. Thus, it has taken several labor management policies. First, it adopted Senmon Gino Shutoku Seido (a system of acquisition of specialized skills), which was a career development program to expand full-time production workers' scope of skills. The second policy is MR-50 activities which promote the introduction of barrier-free production machines and the standardization of production works. Third, Toyota management has provided opportunities for capable non-typical production workers to be promoted to the status of Toyota's full-time employees. And fourth, it took a policy to promote flexible deployment of production workers across Toyota-group companies so that firm- or workplace-specific skills would be widely shared by workers working for these companies. Since the QCD (Quality, Cost, Delivery) aspects of automobiles depend on the Kaizen competency of full-time production workers, it is expected that Toyota Motor Corporation will not resort to an excessive substitution of non-typical workers for typical workers in the future.