December 23, 2008
How bad is the global economy?
Things have gotten so bad that even Toyota is showing a full-year loss for the first time in the corporation's history. But according to The Truth About Cars, Toyota is moving quickly to respond.
Toyota doesn’t just sit there. They do something: Toyota is facing its first full-year loss ever, $1.68b for the whole fiscal 2008. Never mind that this is approximately the cash GM burns through in a bad month. For Toyota, it is a huge embarrassment. Toyota will do immediately what GM ignored: Embark on drastic production changes.
“The speed, breadth and depth of the global economic downturn is beyond what we had imagined,” says Toyota President Katsuaki Watanabe. Their measures will be likewise drastic. Toyota aims to revamp its operations so that it can turn a profit even if parent-only sales fall by 17% from 2007 results.
All new production upgrades, including the opening of a plant in the U.S. state of Mississippi scheduled for 2010, will be postponed or scaled down. Capital spending planned for fiscal 2009 will be cut 30 percent to less than 1 trillion yen. For starters.
By the way, directors will forgo their bonuses this fiscal year.
Stop and consider this: Toyota didn't suffer this badly when Japan was in the process of losing World War II.
It'll be interesting to see how quickly the Japanese automakers manage to turn on a dime and start making money again.
More information on the Asian automakers' plans here.
Posted by Mike Lief at December 23, 2008 07:49 AM
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Comments
The entire world is paying the price for corporate greed and corruption. Deregulation equals meltdown of epic proportions.
Posted by: I Live Green at December 23, 2008 10:16 PM