Holy global overcapacity, Batman! Trading Markets reports that the world’s largest automaker is cutting Japanese production in half and overseas production by 43 percent, as it struggles to touch bottom. Toyota and its Hino and Daihatsu subsidiaries will produce 433,979 units gobally in April, down 46 percent from April 2008. Exports from Japan have been hit especially hard, dropping 70 percent (year-on-year) in April. According to the WSJ, all of the Japanese majors are dramatically decreasing domestic production on falling sales. Even without bankruptcy filings, it seems everyone in the gobal car game is facing some form of reorganization. Like Renault/Nissan’s new attempt to find another $2 billion in “synergy” savings. Try looking under the couch cushions, guys.
Toyota can do no wrong… ???
I wonder what the New York Times has to say about this. Or will they say anything becasue they’re too busy verbally beating-up Chrysler and GM?
As a person with an interest in real justice (as in, people should take the consequences of their own actions and not suffer from other people’s foolish actions), I have to say that I hope Toyota and Hyundai and other car companies which haven’t had to suckle on their government money-teat, succeed well; and the those who are vampire like, fail miserably.
Toyota at least has the benefit of having been run VERY well – up to and including the ability to make good profits and pay decent wages, generally stand behind their product as well as engineer good to very good products.
GM and Chrysler could have learned best-practices, especially GM which has had a 50/50 JV with Toyota at NUMMI in California for decades; but hubris, pride, and the NIH (not invented here) factor would not apparently let them learn lessons on a wholesale basis, nor use them.
May the righteous survive; and the incompetent not survive.
In other words, I’m dead set against state-fascism as practiced by Barack Hussein Obama and puppets.
Remember; fascism isn’t right-wing; it was a description of the National Socialist party of Germany and Italy in the 1930’s-1940’s.
And they can reduce capacity without immediately breaking the bank because they don’t have to pay Job Bank for furloughed workers.
not only is fascism used wrongly, so is the term “progressive”
anybody at all read in history knows this is not a badge of courage, but communism and socialism.
from the horrible president wilson and the beginnings of socialism in this country, being a progressive is not a good thing.
that’s why its was stunning to hear our sec of state clinton recently call herself a proud progressive.
but looking back, i guess the idiot really always was.
as is obama and his entire gang from illinois.
but really, to think the foreign companies were all playing fair while the domestics were not is naive. if you understand how the japanese work, or how the europeans society is structured and financed, from health insurance to unemployment support, then you see how they also finance their manufacturing base.
there is no such thing as a level playing field
or fairness.
@Menno:
” I have to say that I hope Toyota and Hyundai and other car companies which haven’t had to suckle on their government money-teat, succeed well…”
Are you forgetting all those years the Japanese government poured money into them through the back door by subsidies, tax breaks, tariffs, etc. while they were trying to enter the U.S. market?
The domestics would never be able to do this. Scale back production when sales drop? Forget it. The price of playing ball with unions and government is your autonomy, and they would never allow it to happen.
Their solution would be to build cars and hire workers to dismantle them so they could be built again, much like the slaughtering of pigs ordered by the government during the Great one.
Menno:
“As a person with an interest in real justice (as in, people should take the consequences of their own actions and not suffer from other people’s foolish actions), I have to say that I hope Toyota and Hyundai and other car companies which haven’t had to suckle on their government money-teat, succeed well; and the those who are vampire like, fail miserably.”
You can scratch Toyota from that list, it was published here, per Automotive News, and you can read it below:
Toyota Financial Services has requested a $2B loan from the Japan Bank for International Cooperation, a government-backed lending institution. TFS says it needs the money to cover the higher cost of borrowing in the US. According to Automotive News [sub], “Toyota may be the first of a string of Japanese companies with high credit ratings to turn to state-backed loans prior to the closing of books for the business year at the end of March.” Toyota’s “implied” credit rating based on credit-default swaps is considerably lower than its current Moody’s rating, as fears grow about liquidity problems across the automotive industry. The money will come from a $5B fund established by the Japanese government to provide liquidity for firms which operate abroad. These funds are said to come from Japan’s $1T+ in foreign cash reserves, the world’s second-largest foreign currency reserves after China. Nissan and Mitsubishi have also said they will apply for loans from this fund.
Actually, Toyota does not lay off permanent employees, even in the US, when it reduces production.
“Toyota Scales Back Production of Big Vehicles” by Bill Vlasic and Nick Bunkley in the NYTimes on July 11, 2008:
With sales of pickups and big S.U.V.’s tumbling, Toyota said it would shut down truck production at two United States plants for three months and consolidate its pickups into one factory next year.
… Toyota is taking a page out of Detroit’s playbook by ceasing truck production at its plants in Princeton, Ind., and San Antonio from Aug. 8 until early November. The company will also suspend production of V-8 engines at a factory in Huntsville, Ala.
More than 4,000 employees will be affected, but the workers will be paid and attend training sessions during the shutdowns.
“By using this downturn as an opportunity to develop team members and improve our operations, we hope to emerge even stronger,” said Jim Wiseman, vice president for external affairs for Toyota’s North American manufacturing division.
Which explains why GM will be liquidated, and Toyota will survive and return to prosperity.
More than 4,000 employees will be affected, but the workers will be paid and attend training sessions during the shutdowns.
So it’s like the Jobs Bank, only with fewer rounds of solitaire and checkers.
***I have to say that I hope Toyota and Hyundai and other car companies which haven’t had to suckle on their government money-teat, succeed well;***
I’m definitely not a fan of D2.8, but literally every automaker in the world gets/got one form of subsidy or another…whether it’s government trying to lower its home currency (eg. virtually every export-oriented developing country and Japan) or favorable government regulation in its home market (Hyundai, Tata, Gaz, Proton, etc).
Automaking = lots of good-paying jobs (and votes) no matter what country you live in.
@Commando1
Are you forgetting all those years the Japanese government poured money into them through the back door by subsidies, tax breaks, tariffs, etc. while they were trying to enter the U.S. market?
Citation please.
Anyhow, that’s like saying “Are you forgetting all those years when the British Government poured money into the colonies?”
Translated – “That’s ancient history, and even if it were true what does it have to do with anything now? “
Toyota has benefited disproportionately from misguided US subsidies for hybrid cars in recent years.
To imply they have not suckled on the government teat is offensive to the taxpayers who have paid for this cash infusion.
@SRH –
Assuming you are tagging onto my question to Commando1, note that he said “Japanese government“. Toyota was doing research on
hybrids when nobody wanted them.
If you want to claim that they did that with government money, I’ll be glad to accept that fact, with some documentation.
Cite please.
Toyota has its skeletons in its closet. A lot of Toyota’s have been stuffing rental fleets for several years now and its coming back to bite them with lower margins and resale value.
However the Prius is the best hybrid out there and there’s nothing wrong with getting the tax credit to help sell cars – Toyota did nothing wrong there and I think any criticism is misguided at best.
@Lokkii
I was responding to Menno’s assertion that Toyota has not “suckled on the government teat” when in fact they have. I should have been more explicit; I assumed my reuse of his words would make that clear.
Surely you don’t need documentation describing the hybrid subsidy? Perhaps you want documentation that it was misguided, in which case I’d encourage you to look to any economics textbook.
stop.
if you are going to attempt to tell all of us what companies, especially the domests, have been researching, you are guessing…at best.
to tell us toyota experimented with hybrid tech while nobody else did is simply a continuation of popular myth.
unless you are actually intimate within these companies, research dollars are pretty closely held secrets
and i am not sure if hybrid tech is even proven to be a long term success.
nobody can tell me what will be the successful tech used 5 and 10 years from today.
not anymore than you could have told me my 401k was going to be worthless a year ago.
if you say you can, you are a fool or a liar.
or both.
Wow! Two comments to prove Goodwin’s Law.
Kudos!
With Toyota cutting production by almost 50%, will this increase VW’s chance of becoming the world’s largest automaker this year?
Ignorance is bliss :)
Am I crazy or has anyone else noticed that Toyota hasn’t really been piling on the incentives like everyone else to move the metal?
The ads I see for GM, Chrysler, Nissan, etc. all seem to be “0% for 22 years,” “$12,500 cash back,” “We’ll make your payments and your mortgage and your 401(k) contribution if you get laid off” kind of deals.
The Toyota incentives seem no different than they were two years ago, aside from very slight Prius discounting now. $1,500 cash back on Camry, $1k on Yaris, etc.
My impression is that Toyota understands we’re at the edge of Niagara Falls as far as the global economy is concerned, and they’re just gonna slash production to adjust, instead of destroying resale values and brand equity by chasing everyone else to the bottom with crazy incentives.
Toyota seems to have moved on to the acceptance phase of this depression and is setting up shop to be profitable in a market with ten million annualized sales, indefinitely.
Robert Schwartz:
“Actually, Toyota does not lay off permanent employees, even in the US, when it reduces production.”
No, they just lay off their full time “temporary” workers who number in the thousands. So does Nissan. Both have laid off THOSUANDS of workers in Japan in the past two years. I bet the last “permanent employee” they hired was in 1998. In the end it’s the same as the domestics. But they can say “See, we don’t lay off our workers like those mean Detroit automakers”.
windswords:
The American plants reported on in that article were opened well post 1998.
The real punchline is:
… the workers will attend training sessions during the shutdowns. “By using this downturn as an opportunity to develop team members and improve our operations, we hope to emerge even stronger, …
Training the workers to do their jobs better. Imagine that. See how the Japanese cheat.
If auto assembly is oh-so-easy as it many in the past have alleged it to be, how much training can they possibly need? I thought it was all just take a bolt, screw a bolt, repeat.
Robert Schwartz,
I said Japan, not the US. Just google “Toyota layoffs”, “Nissan layoffs” or “Auto layoffs in Japan”. This is not some big secret.
Wait . . . isn’t being ‘paid to attend training sessions’ during a plant shutdown another way of saying “jobs bank”?
Why is it somehow good when Toyota does this, but bad when Detroit does?
Menno and paulie need a little help with history.
Just because Hitler named his party the “National Socialist Party” doesn’t mean the Nazis were anything but profoundly right-wing. Hitler was one of history’s most virulent anticommunists.
As for the term “Progressive,” please recall that Theodore Rooselvelt, that great Republican saint, ran for president on the Progressive Party ticket in 1912.
Labels like “socialist” and “progressive” are just words and, like “fascist,” they are constantly misused.
Unfortunately every manufacturer is given the benefit of government subsidies and protectionist policies that favor it.
The Korean market is virtually isolated from any real form of foreign competition. It’s come in every form of government regulation, distribution control, and tariff.
The Japanese did the very same for decades, and developed a dealer network that made it virtually impossible for an American or European firm to do any profitable business these. They also have a very influential government agency (MITI) whose soul purpose is to support the exporting of Japanese products.
There is a long history of protectionism and mercantilist policies within their auto industries. They have also done a lot of very beneficial things to the American marketplace, but to say that the playing fields in Japan and South Korea are even remotely similar to our own is a complete joke.
I really think discussing this is like talking about the fact that a lot of folks in the midwest eat turkey on Thanksgiving.
You may as well be arguing about the
Jimble
I apolize to all in advance for this ranting…
First, I am always in need of another history lesson.
Its my fav.
But you are wrong.
Hitler was not only anti-commie, but anti everything.
He was psycho.
What really is the difference between his Nazis and Stalin’s group?
And the “progressive Party” of Roosevelt was not the progressive part of history and socialism.
Let me help you.
The progressive party of which I and most people speak began in 1924 with Senator Lafollett(?) of Wis.
It was made up of farmers, radicals and organized labor.
It was an outgrowth of the “group of 48”, formed in 1918, I believe.
But, Big T Roosevelt was/is not considered a conservative, which I am.
In fact, it was he with his break away from the Republican party during that very same election you mention that watered the republican vote and allowed the very horrible Wilson co-presidency (his wife actually made the decision after his stroke, the progressive party and the eventual madness of European carved up society that brought on WW2.
He and the damned French, ingrates.
T even broke up the big monopolies, not really a republican position at the time.
The progressive party eventually succumbed to the influence of its communist and socialist members.
Nazi’s were extreme right wing, Stalin extreme left wing. Many have pointed out extremism meets at the same point if you go extreme left and extreme right. Neither Hitler or Stalin tolerated dissent, you died if you spoke out. Some have also pointed out, the Soviets never practiced true communism. China is still communist, and they have one of the fasted growing economies in the world. Some would say we do not have a democracy or a republic, but we have an oligarchy. We seem to have socialism for the well connected, and hard capitalism for the masses.
As this sight is so strongly pointing out, what do we have happening in this country?
Never has there been such a government involvment in the private sector.
What is going on?
And what power do each of us have?
I suppose TTAC is doing its very best, however powerless and useless.
I kind of understand what it must have been like in Germany in 1933. Yes, yes, I understand that there were real people being mass murdered, but still, as an individual, you must have felt torn.
My life or those being persecuted.
My family or the Jews next door being dragged out tonight?
Hmmm.
Here, right now and today, what do you and I do?
While we rant and rave to each other, the people in the position of power simply do as they wish.
The money just keeps getting passed around.
From the pockets of the people to all the big business friends and donors.
I feel powerless.
I fell like I am being raped as are our children’s future.
I think I shall be much more understanding now before I Monday morning quarterback the past.
I know now how it feels to be bitch slapped by Knuckes at the beach.
All politics aside..I’m just glad we’ll be getting 46% less appliances – boring cars – in the next few months. Hurray!
As for teats, Japanese gov’s ones are very, very large…to say toyonda never sucked on them…size triple Ds???
Dudes, haven’t you seen the exchange rate recently? The yen’s been popping, so no wonder manufacturing is dropping. And it’s why all the Japanese manufacturers are being hit.
As to “sucking off government teat” it’s nearly universal in cars. The US light truck tariff, Japanese tariffs and retail requirements, etc.
And finally, keeping lower paid workers on during shutdown is still a lot cheaper than paying for a complete spare workforce like the Job Bank does.