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Well, several things are crystal clear when you read the article at Bloomberg cited above (I couldn’t get the video to work)…
Mr Toyoda is well grounded in reality.
Mr Toyoda and Toyota company aren’t sticking their fingers in their ears saying “nah nah nah nah” or putting their heads into the sand – they are aware of the major problems (many of which were not their “fault” but which should have been anticipated as potential problems by management).
Toyota is still a large player, and has a good chance of coming through this (but as Mr Toyoda says, even Toyota is not too big to fail).
Extrapolating from the Yen vs Dollar, I will go out on a limb and guess that with flexible manufacturing, Toyota will be selling 90% to 95% North American manufactured vehicles in North America within 3 years (the timeframe it is likely to take to implement production of cars in the plants).
I’ll also say this. If Cap & Trade comes into place, and gas prices DO increase over 50%, then Toyota will start to again do well with hybrids.
When I filled up my BMW collector car “toy” (before putting it away for the winter – nope, I didn’t forget Sta-Bil in the gasoline) at the Marathon station, they were advertising on top of the pumps that we the people should contact our
elected representatives and let them know what we think of 53% gasoline price increases which will result from Cap & Tax.
Wonder how long it’ll be before they’re ordered to cease & desist just as the insurance companies (which were doing similar things) were by Obama & Co?
“Klop”. (right arm flies up)
And this makes me more apt to buy a Toyota because…?
It doesn’t. It all comes down to the cars. I don’t care whether the CEO of the company that made them is circumspect about his failures or not. If his car is best, that’s the one I’ll buy. If it isn’t, I won’t.
menno :
October 2nd, 2009 at 10:54 am
When I filled up my BMW collector car “toy” (before putting it away for the winter – nope, I didn’t forget Sta-Bil in the gasoline) at the Marathon station, they were advertising on top of the pumps that we the people should contact our
elected representatives and let them know what we think of 53% gasoline price increases which will result from Cap & Tax.
LOL…you don’t think an oil company might be fudging on that figure any, do you?
The quote I liked (from the bloomberg article, I can’t get the quicktime file to work) was this:
Toyoda said the 72-year old company, established by his grandfather Kiichiro Toyoda, will “need to groom young people to be making cars for the next 100 years.”
“The salvation for the company isn’t me,” he said.
Is it this type of thinking which will keep Toyota on an even keel. We know Toyota will churn out cars people want, at a profit, in the shirt term, but it needs to start planning to ensure that this carries on. This is the problem Ford will face in about 5 years from now. Yes, Mr Mulally will do well and instill a vision to help Ford, but without a decent set of managers around him and a decent group of potential CEO’s, it won’t account for much.
Personally, I’m not worrying about Toyota or Honda for that matter. Their track record suggests that they will ride this out and probably be stronger for it. The ones to watch are:
Nissan: Renault are struggling badly in Europe and may look to sell some of Nissan to help restructure (The EU aren’t happy with the French Government’s loans to Renault and Peugeot-Citroen). And without Renault’s guidance, Nissan may slip back to circa 1995-1999.
FIAT: If they can’t make Chrysler work, FIAT may go under as they need the volume to survive.
Opel: Now that Frau Merkel has won the German Elections, those loans may be a little fragile, since they were just stalling for time until the elections. Most of Germany were opposed to the bailouts and if the German government say “nein” to the loans, then Magna may walk (possibly saving their supply contracts to major OEM’s) and Opel will go under. Much to the delight of Ford and VW.
That’s what I think anyway.
@Freemike
For me, how a company acts is VERY relevant to whether I buy their cars or not. Take Ford, I actually like the Fiesta and Ford Focus Cabriolet, but I would NEVER buy a Ford because I can’t stand their management (insert comment about Mark Fields) and the thought of my money paying their wages just makes me sick. Likewise, GM and Chrysler are off my list because of their corporate arrogance (I’m not funding Bob Lutz’ pension!). Also, I look to what car companies build in the UK, because I’m a big believer in looking after UK jobs and supporting the UK economy. If they don’t build in the UK, I’m not interested. So for some people, it’s more than whether a car is good.
“Jim Collins, author of “How the Mighty Fall”. Collins explained that great companies typically go through five stages on their path to ruin. Toyota is at the fourth stage; the final stage is “capitulation to irrelevance or death.””
At what point was GM at stage 4? and how many times did they give lip service to having to change? And at what point did people stop believing them and finally stopped buying thier cars?
While manufacturing the cars in the US helps, the results are still converted to Yen, AAA rating is based on stock price, profits start going down, stock price starts to fall, AAA rating losts, debt costs begin rising, costs have to come from somewhere else, the vehicles, consumers notice and begin buying less, you talk about change, but without making the changes required, consumers buy even less of your cars, stock price falls, you loss investment grade rating, borrowing costs rise, you have to make the costs up somewhere….
The words are good, but in the end it’s actions that count. It will be interesting to see how Toyota does change–or fails to.
Most everything on the market meets a reasonable standard of reliability and safety, making it possible to choose heavily on price.
Toyota has nothing that stirs an emotional connection to the broad market. Without that connection, cars are a low-margin commodity business.
Katie
Ford has over 200000 employees all over the world.
It is too bad for the other 199999 you are making your buying decision based on only one.
This video starts with a brief ad for the E & Y strategic growth forum, but the first face that appears in the ad is that of one Robert Nardelli.
E & Y: Uh, guys, are you sure you want to have his mug on your ad? Especially one allegedly for “market leading” companies??
I can’t even open the front page using Firefox right now. Locks me up. I’m pretty sure it has to do with this embed. IE prompted me to upgrade Quicktime even though I haven’t yet tried to play this content. That shouldn’t happen.
Juniper,
1. That one employee wields far more power than 199,997 of the employees at Ford. So, I believe it has far more relevence than you gave it credit for.
2. Actually, there’s 2 employees I can’t stand. But I won’t reveal the second person.
Suffice to say, Ford aren’t getting my business anytime, soon.
Shame, as Jaguar shares some parts with Ford.
When I filled up my BMW collector car “toy” (before putting it away for the winter – nope, I didn’t forget Sta-Bil in the gasoline) at the Marathon station, they were advertising on top of the pumps that we the people should contact our
elected representatives and let them know what we think of 53% gasoline price increases which will result from Cap & Tax.
What, you mean actually pay for a previously-externalized cost? That’s un-American! Next thing you’ll be making me pay fifteen cents for grocery bags!
Let’s just pretend it doesn’t exist and foist the responsibility onto future generations instead.
At what point was GM at stage 4? and how many times did they give lip service to having to change? And at what point did people stop believing them and finally stopped buying thier cars?
GM never, ever gave lip service to change. Never. That would mean admitting they’d been wrong in the first place. The closest they came was Roger Smith, and he managed the most oblique, roundabout, wasteful, expensive and just plain crazy way of doing so.
As far as I’m concerned all Toyota needs to do is shuffle some chairs in the product development department.
great reply. these idiot americans dont get it.
I wouldn’t say it’s purely an American thing, and I don’t think it’s stupidity as much as it is dumb historical luck.
Humans are naturally conservative, but America has two things going for it (or problems, depending on your point of view): a stronger conservative social tradition than most countries, and a half-century of the political and social establishment doing solid hatchet-jobs on progressivism.
It’s interesting to note that many western countries came out of the 1960s and 70s significantly more liberal than they went in; America (and a few other English-speaking nations, to varying degrees) came out more conservative. The 1960s and 70s were really a loss in that respect, not a gain, and those losses were solidified under the likes of Reagan and Thatcher. That said, the US supressed leftism (since at least 1930) like no other nation on earth, to the point where politicians like Obama, who would be moderately right-wing anywhere else int he G20, are considered radical leftists in the US.
One of the reasons the US is grappling with things like health care, the environment and poverty is because of this tradition. To varying degrees, the liberal movements in most other western nations addressed this—sometimes painfully—long ago.
GM has to be the most arrogant corporation to have ever existed, completely blinded to its own fatal flaws for decades.
I never saw any corporation so seemingly impervious to the makings of the foundation of their own demise.
I don’t know what the future holds for Toyota, but they’re much more cognizant and seemingly concerned over their early failures than GM remotely ever was.
The yen’s 7.4 percent gain against the dollar in the third quarter also eroded earnings from exports.
Good to see that our dollar is so respected and doing so well…(wink wink)!
“The salvation for the company isn’t me,” he said.
Very disturbing. I know how these people are. Sure hope he’s not considering suicide. Can anyone imagine Herr Piech coming out with something as weird? I’m sure this really pumped up the investors. God what a depressing article…
Well said, ohstapback, and I’m pretty darned certain that Toyota won’t end up as the “next GM”.
If Toyota do die, it won’t be from the same disease that GM got. It’ll probably be from total economic collapse or some such calamity.
mpresley, you are confusing “depressing” with “realistic in the real world” which right now, is not made up of peaches & cream.
Better to be aware of the hungry wolves at the door and prepare to open it when you are in need of water from the well, than just swing that door open and look surprised….
As far as Toyota building cars that create an emotional connection to the user…I find that in america, it’s a lot like the food. A lot of people are not adventerous. Toyota is (well…was) a safe bet for a car, truck or SUV. By being bland and boring, they appeal to as many people as possible.
As for supressing leftism….
55 million dead under Stalin.
75 million dead (or more) under Mao.
11 million dead under Hitler (National SOCIALISM isn’t right-wing; it’s left)
Unknown number of dead under North Korean rule.
Unknown number of dead in Eastern Europe COMECON era.
So, suppressing leftism is bad – how?
Menno, nearly all of these, the exception of maybe some of the Eastern European regimes, you’ve listed authoritarian dictatorships with a personality cult around the leader. I don’t think that has anything to do with left or right, just “crazy.” (By the way, you left out Saddam and Qadaffi)
@Freemike
For me, how a company acts is VERY relevant to whether I buy their cars or not. Take Ford, I actually like the Fiesta and Ford Focus Cabriolet, but I would NEVER buy a Ford because I can’t stand their management (insert comment about Mark Fields) and the thought of my money paying their wages just makes me sick. Likewise, GM and Chrysler are off my list because of their corporate arrogance (I’m not funding Bob Lutz’ pension!). Also, I look to what car companies build in the UK, because I’m a big believer in looking after UK jobs and supporting the UK economy. If they don’t build in the UK, I’m not interested. So for some people, it’s more than whether a car is good.
I think that’s a silly reason to buy a car or not, but it’s your money – spend it how you like.
But I do think you’re in the minority – most buyers are more interested in the car they’re buying than whether the CEO of the company that makes it is an asshole. Frankly, if that’s the criteria, I don’t think people will be buying cars from ANYONE. :)
Patrickj :
October 2nd, 2009 at 12:02 pm
Toyota has nothing that stirs an emotional connection to the broad market. Without that connection, cars are a low-margin commodity business.
Nailed it on the head…Toyota cars are dull.
But before we write off companies that make dull cars, let’s not forget the most beautiful, highest-performance cars can connect with buyers all day long, but if they’re pieces of crap, the company that makes them will eventually fail.
Toyota has a HUGE leg up in this regard. They don’t build pieces of crap.
european :
October 2nd, 2009 at 1:41 pm
great reply. these idiot americans dont get it
If not for us idiot Americans, all of Europe would either be a) goose stepping, or b) erecting statues of Lenin on every corner. Consider that next time you want to bash us.
Menno
As for supressing leftism….
55 million dead under Stalin.
75 million dead (or more) under Mao.
11 million dead under Hitler (National SOCIALISM isn’t right-wing; it’s left)
Unknown number of dead under North Korean rule.
Unknown number of dead in Eastern Europe COMECON era.
So, suppressing leftism is bad – how?
Right-wingers aren’t exactly innocent
menno :
October 2nd, 2009 at 2:35 pm
As for supressing leftism….
55 million dead under Stalin.
75 million dead (or more) under Mao.
11 million dead under Hitler (National SOCIALISM isn’t right-wing; it’s left)…
So, suppressing leftism is bad – how?
Hmmm…well, I’d say there’s a little ideological difference between, say, Mao Tse Tung and Barack Obama, wouldn’t you?
But OK, let’s play “hang an ideology with the sins of its far out fringe.” Using the same logic, here’s what we hang on conseratism: Mussolini, Tojo, Noriega, Pinochet, theocracies like the ones in Iran and Afghanistan, people who blow up abortion clinics and gay bars in the name of God, and Tim McVeigh. Oh, and don’t forget the whack jobs who hide out in caves in Montana so they don’t have to pay taxes.
And Hitler was leftist? Don’t even go there. The central tenet of Nazism was, in fact, anti-communism. The two forms of government were anthetical to one another. That’s why Hitler attacked Russia. And the only reason he put the name “socialist” in Nazism is that it was in vogue at the time. You can’t get any further right than ol’ Adolf.
But if you persist in the “Nazism = leftism” argument, then you run up against this one: the overwhelming majority of American Jews are politically liberal. Ditto for Germany before the war. Now, if Nazism and leftism are in bed together, why the hell would most Jews count themselves as leftists? And why would the Nazis seek to murder millions of their fellow ideological travelers?
Menno: Wow, Godwin’d in the first post
OK, let’s reign in the political discourse folks. Don’t make me pull this thread over…
jkross22 :
October 2nd, 2009 at 12:30 pm
This video starts with a brief ad for the E & Y strategic growth forum, but the first face that appears in the ad is that of one Robert Nardelli.
Not sure why he’d be invited to any forum about “growth”…unless it’s a seminar entitled “Here’s How I Jacked Up Two Great Companies And Came Out Rich.”
@menno:
Biggest surprise of my day: Hitler was a lefty.
I never knew.
Thanks.
Here I’d been under the impression for 62 years that he was a right wing fascist dictator, just like all the other belly-button gazers such as Kim-il Jung, Mao, Stalin, Castro and every one else who runs a society that praises only themselves, under fear of death.
But I was wrong, apparently. They were lefties all along, spending every waking minute being concerned about their downtrodden subjects, altruistically serving the public good. We know this because they co-opted the words socialism or communism to describe their political systems, like any good con-artist politico does.
Who knew?
Roger Smith was saying the same thing in 1981……
Edward Niedermeyer: “OK, let’s reign [rein] in the political discourse folks.”
Aw gee, Edward, and I had prepared some zingers that would have made the other side agree 100% with my political views.
And just like Roger Smith
http://jalopnik.com/5372825/toyota-chief-blames-us-for-inability-to-make-a-profit
You blame someone else.
Looks like the next decade for Toyota might be what the 80s were for GM.
Continuous internal critique of their performance and a huge pile of cash assets should ensure Toyota survive.
Sorry, but I know this company extremely well and I don’t buy it.
Toyota has been completely incapable of managing their cost structure. I’m not talking about a year ago… or two years ago. I’m talking right now.
* A massive number of retirees compared to Hyundai/Kia, Honda, and Nissan.
* An American infrastructure that has done virtually no major realignments other than the long overdue closing of the NUMMI plant in Fremont.
* No real plans to discontinue or consolidate product lines other than the Avalon. Keep in mind that Toyota’s Xb and Xd are not only sales losers but also de-facto cannibals for the Yaris and Corolla.
* Absolutely no sporting pretensions within any of their best selling cars (Yaris, Corolla, Camry). This is proving to devastate their ability to grow with the younger generation in a way that’s eerily reminiscent of GM’s recent struggles.
* An unyielding tendency to shove convoluted designs down the throat of consumers while the strongest competition offers far more beautiful car bodies.
The Yaris, Corolla, and Camry are between bland and ugly.
The Scion Xb and Xd are warthogs in heat.
With the exception of the Lexus ES350, the entire Lexus line hasn’t offered a single distinctive design that appeals to the mainstream. They’ve almost become Bangle-ized without the needed proportions.
* And finally the Prius. A truly fantastic car that can’t seem to get beyond the orphan stage. Instead of offering cars that are distinct hybrids, Toyota has chosen to integrate their current vehicle designs as hybrids… which seldom works when you want to register strong and lasting growth.
@ Steven Lang
A massive number of retirees compared to Hyundai/Kia, Honda, and Nissan.
Completely paid for and locked away, unlike GM’s etc funded by (defaulted) IOUs.
An American infrastructure that has done virtually no major realignments other than the long overdue closing of the NUMMI plant in Fremont.
You could be onto something there but a (hybrid-everything) change is coming.
No real plans to discontinue or consolidate product lines other than the Avalon. Keep in mind that Toyota’s Xb and Xd are not only sales losers but also de-facto cannibals for the Yaris and Corolla.
My information is that process is under way right now, and will be “aggressive” (well sort-of).
Absolutely no sporting pretensions within any of their best selling cars (Yaris, Corolla, Camry). This is proving to devastate their ability to grow with the younger generation in a way that’s eerily reminiscent of GM’s recent struggles.
As much as I lament it myself, there seems no shortage of repeat buyers and Toyota know the younger generation do understand the value/appliance they need.
An unyielding tendency to shove convoluted designs down the throat of consumers while the strongest competition offers far more beautiful car bodies.
Are they bland or not? Bland is down the middle (50%), neither pleasing (%25) nor offending (%25) anyone. The “look” of a vehicle rates low down in the purchase decision priorities.
Toyota has chosen to integrate their current vehicle designs as hybrids… which seldom works when you want to register strong and lasting growth.
Ah yes, but they’re betting the farm on $4/gallon (or higher) gas in the next 3-5 years. Every model will have a hybrid drive train. Probably some hybrid exclusively. I expect they’ll be best sellers and their hybrid manufacturing capability will leave others in the dust.
I happened across the 2008 The Car Book. Not a bad publication but it needs a counterbalance to keep things in perspective, something like the Consumer Reports Annual Auto issue.
Anyway, I was somewhat surprised to see that the Toyota and Honda warranties are rated Poor. Not just below average, but Poor. Some of their vehicles also failed crash tests by a wide margin.
Some Hyundai models scored high marks on reliability, fit and finish, perceived quality, NVH, warranty, and crash test results. Recent sales numbers show they are on a roll.
Is Hyundai about to have a breakout year? Is Hyundai firmly on plan to punch a hole in Honda and Toyota sales?
The one thing Toyota has going for it when it comes to reinventing itself: they don’t make junky cars. Bland cars, perhaps, but not junky.
BTW:GM has been making the “we’ve changed” claim every decade since 1980. Or claiming the new product was going to drive the Japanese “back into the seas”.
Don’t know where anyone ever got the idea they “never did”.
Witness the full page newspaper apology ads they tooks out a few years back as one example in a long line of public acknowledgents of their screw ups… but we’re different now. Please. Heard it too many times over the course of 4 decades.