Toyota, Honda, Nissan, Mitsubishi and Mazda are all asking the Japanese Gov't for loans:
http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090304-Toyota-Honda-Mazda-May-Ask-for-Government-Bailout/
http://www.businessweek.com/globalbiz/content/mar2009/gb2009033_969062.htm
So GM and Chrysler aren't the only ones that got caught with their pants down around their ankles. They just make more headlines in the regular US news.
Yes, here was a reply I wrote to someone on another board when Toyota posted their $7.7 billion QUARTERLY LOSS and they defended it as just an issue with exchange rates:
Now if since 1950 the Japanese Yen had never spiked or sank in relation to the global currencies in the markets they were in, I would happily agree with the spin either you or the writers at Morningstar are applying to these results.
However through the US recession of 1972, 1981, the regional recession of 1986, 1991, and 2000, along with Japan's own woes through most of the 90's and early 2000's Toyota, despite all the swings in global currency still found a way to make a profit.
Here are some cold hard facts. Toyota's global manufacturing capacity gives it the ability to build 10.0 million vehicles a year.
Toyota predicts it will build 6.68 million vehicles in 2009. Now this is really simple math, Toyota has excess manufacturing capacity globally of 33.2%.
ACK! That's positvely Detroit grade excess capacity.
But, but, but, how did this happen? How could have this happened? Well Fitch put it best on November 25, 2008 when they cut Toyota's credit rating. The first of three cuts that have happened in the last six months. Now admittedly losing your AAA credit rating isn't a "bad" thing in the big picture, but this is the part Fitch got right:
...The car manufacturer's heavy reliance on U.S. demand, which may not rebound for a several years and is not completely offset by emerging markets sales, made its outlook more negative, Fitch said. It also suffered from its decision to expand in the pickup truck and sport utility vehicle markets--with gas prices having spiked over the summer...
Wait a minute, Fitch is talking about General Motors right? Over reliance on U.S. demand? Decisions to build trucks and SUVs? No - this is Toyota.
But, but, but, but, now you're telling me Toyota has excess manufacturing capacity of 33.2%, their product mix is truck and SUV dependent, and they are not diversified enough in emerging markets. THIS CAN'T BE!!! Lies! It's vicious lies!
Lets look at Toyota's factories they've built in North America since 2006:
Toyota Sequoia & Toyota Tundra: San Antonio, Texas
Toyota RAV4: Ontario Canada
Toyota Highlander: Orginally slated for Blue Springs, Mississippi, factory is on hold indefinitely and now built in Princeton, Indiana
Toyota V8 Engine Factory: Huntsville, Alabama
So lets recap, four factories/production lines added since 2006 in North America and all of them to build SUVs or pickup trucks, including the worst fleet economy pickup trucks money can buy in North America. There is so much over capacity, that Toyota employees are taking classes on corporate history, tending the flower beds at San Antonio, and doing other general busy work. And they are doing this at full pay and benefits because Toyota has vowed not to layoff any US employees. However that vow to the 33,000 workers is thin, as buyouts were offered to 18K employees on February 13, 2009, with exception to the UAW workers that work for Toyota. You did know that NUMMI in Long Beach is staffed with UAW workers, right?
And back to the subject of trucks, lets not forget that Toyota also brought the FJ Cruiser to North America in late 2006 as a 2007 model, with its Hummer H3 class MPG.
But, but, but, but, but. Now you're telling me that Toyota has 33.2% excess manufacturing capacity, is overly reliant on North American sales, invested too heaviliy in truck and SUV production in the last five years, is trying to shed up to half of its US workforce, except those UAW employees???
But wait, there is more. From this November 26, 2008, BusinessWeek article, Toyota was still stating it would make a profit for their fiscal year. Instead they suffered a multi-billion dollar loss, a loss that Toyota expects now to accelerate through their 2010 fiscal year.
So let me get this straight then. Toyota has 33.2% excess manufacturing capacity.
Yes
Toyota is overly reliant in the North American market for profits?
Yes
Toyota invested far to heavily in gas guzzling trucks and SUVs over the last decade?
Surprise - yes.
Toyota has workers essentially, "job banked," who do minor tasks or training while receiving full pay and wages, they aren't building cars or trucks?
Yes
Toyota is trying to buyout up to half of its US workforce while retaining the UAW workers they have contracts with?
Yes
Toyota apparently couldn't accurately forecast out just four months of corporate performance?
Yes
And this goes back to my original point. You dismiss Toyota's quarterly loss for the period of Jan 1 to Mar 31 as something related to exchange rates. But there have been other recessions. There have been other times when the Yen was weak and the dollar was strong.
But if it was JUST a Yen vs. Dollar, Yen vs. Pound Sterling, Yen vs. Euro, Yen vs. CAD, etc. etc. issue, then why are there all these other issues.
And these issues I've pointed out are conspiracy theory blogs. They aren't from the South Park "'dey terk err jebs" fan website. My resources are Fitch, Bloomberg, BusinessWeek, New York Times, and Forbes. These are pretty respected organizations and none of the material I provided or quotes is "opinion and editorial," content but just raw facts.
How on earth did even Toyota get it so wrong (while Honda on the other hand got it so right). If it was just an exchange rate issue then why on earth did Toyota go on a manufacturing production building spree over the last decade, which is now dragging down the balance sheet with 1/3 of their manufacturing capacity not needed (never mind the NUMMI deal they have with GM or the joint production deal with Subaru, which adds further capacity that is no longer needed). How could they have added so much capacity on trucks and SUVs? How did they get that so wrong?
But that is the point. They did get it wrong. To then wrap Toyota up in a warm fuzzy blanket and say, "well it was exchange rates and that is why," is not by any stretch looking at the big picture of WHY Toyota lost $7.7 billion in ONE QUARTER. And this is a company that hasn't lost a penny since 1950 - talk about amazing, how many publicly traded companies today can claim adding to shareholder equity since 1950. That is impressive, no? So why all of a sudden not a bump, but a calamity.
Any company facing 1/3 excess capacity, idled workers making full pay and benefits, a wrong product mix, and over reliance in damaged, saturated markets is on a path of having problems? No? Would you really say no to that?
The difference between GM and Toyota? Toyota has a mountain of cash, GM doesn't.
