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- phreak79, on 01/06/2009, -0/+44Pretty big news, but Toyota is also famous for not laying off staff so this seems a good compromise.
- fpp2002, on 01/06/2009, -3/+45A rare occurance for Toyota, but not a huge deal for them in the long run. They're losing money over the short term, but they've got tons of cash, no debt, good management, and high quality cars that people actually buy, so they'll be OK.
- mugicha, on 01/06/2009, -3/+31Have you ever owned a Toyota? Those things run forever.
- kingmanic, on 01/06/2009, -3/+23Anecdote: We have a 11 year old corolla which still runs fine. We also had a Dodge Caravan of similar vintage but much less millage died two years ago (280,000 on the Corolla and 150,000 on the minivan).
- ryelli, on 01/06/2009, -17/+36American automakers take note: when Toyota encountered the economic downturn, they took appropriate action. They didn't go running to the government begging for money. Bravo Toyota.
- DigitalisAkujin, on 01/06/2009, -1/+18The Japanese government pays for the medical care of every Toyota employee so I don't see how you can make a comparison.
- inactive, on 01/06/2009, -1/+14I agree, but the truth of the matter is Toyota already receives government subsidies.
- shawns, on 01/06/2009, -0/+8Weren't their workers in retraining programs anyway
- jbmcb, on 01/06/2009, -0/+8Note to American automakers: You are no match for the Japanese Zaibatsus, who get practically unlimited, unfettered, WTO-skirting help from their government through their banking arms.
Think about it this way - Japan has one of the highest costs of living in the world, but car parts sourced from Japan are cheaper than those sourced locally in the US. Figure that one out. - Satanstorm, on 01/06/2009, -3/+11Obviously, American vehicles haven't got their exhaust systems done right or else you wouldn't be so high on the fumes you're breathing right now.
- oboshoe, on 01/06/2009, -2/+9Its pretty big news, but it is good business.
If your product is stacking up in the warehouse (or in this case shipyards), slow or stop production for awhile - Japan1, on 01/06/2009, -2/+9It's the Yen rate. The Yen is probably the strongest currency out there right now, but it means that Americans will have to pay more for their products. When I first came to Japan the Yen was 140 to the dollar...when I bought things I could buy so much more than I can now with the Yen at 88 Yen to the Dollar.
Strong Yen = bad for export economy - xdre, on 01/06/2009, -1/+7Toyota employs fewer US workers than Chrysler, the smallest of the American automakers, and effectively has no retirees by comparison. They also don't have to contend with a union in their US factories.
- erkokite, on 01/06/2009, -1/+7Japanese lazy? That's absurd. They are some of the hardest working people out there. They most likely prefer robots because they are less error prone and more efficient than humans and reduce the risk of injury. A robot can produce far more than a human in a factory.
- SwiftKick34, on 01/06/2009, -0/+6Bear market rally, here we are.
- Gregb11385, on 01/06/2009, -0/+5I know the economic slump has an effect, but is it a possibility that the auto market is over saturated with new vehicles? Similar to the time when Starbucks was so succesfull, they opened up too many coffee shops and then had to downsize. Maybe automakers are producing too many cars while theres is a huge preowned vehicle market. I'm just curious because there is at least two times more running vehicles in developed countries than the population of people.
- SirTwitchALot, on 01/06/2009, -2/+7Toyota employs a number of US citizens in manufacturing plants located in the US. As far as I know, the Japanese government doesn't pay anything for their health care.
- eastwood24, on 01/06/2009, -2/+7All these temp. shut downs are going to bring real headaches down the global supply chain.
- draculthemad, on 01/06/2009, -0/+4Obviously this is the union's fault somehow, right?
Isn't that what every post about domestic automakers in trouble seems to state? - DigitalisAkujin, on 01/06/2009, -0/+4This specific discussion is about Toyota's plants in Japan compared to the Big Three's plants in the US. Please don't think I'm trying to compare Toyota's US plants to Big Three's US plants.
- ThanatosST, on 01/06/2009, -0/+4AFAIK, they haven't been producing cars at an exponential rate over the past decade or so like Starbucks opened stores. Besides, people get in wrecks, cars do wear out, and some people just don't like having a 5 year old car and so will sell and buy new again.
What's happening with the economy being in the crapper now is that people are buying fewer cars, preferring to stick with what they've got until the economy turns around and they can afford that shiny new car. And those that are still buying cars are turning towards used cars or cheaper new ones instead of splurging on high-end cars they don't really need.
I'm guessing that once the economy turns around and people finally get rid of their current cars, Toyota will see a rather large rise in sales and crank up output on their factories. - inactive, on 01/06/2009, -1/+5How do you figure?
Global demand is down, cutting supply is the only viable remedy to sustain the business. - BESTenemy, on 01/07/2009, -0/+3 Personally I went into preservation mode in late 2007, been pulling my money out of the stock market during mini-rallies. Right now I'm 15% in US treasuries, 15% in precious metals and the rest in cash USD and CAD.
Why the US treasuries? Because, despite being a debtor nation, US has most of its debts denominated in its own currency and therefore can never default, like other debtor nations who owe what they cannot print. US did default in the 70's because it was still on a partial gold standard. It could not (or did not want to) honor the gold-denominated debt to France, so it simply refused to pay. Today there are no such constraints. There's just paper money. Everyone's using it. Every government prints it. Those that think US is going to implode are failing to draw parallels between the actions of the FED and those of every other central bank on the planet. Russia's printing, China's printing, Japan's printing, ECB is printing and so on. Germany is one that is currently printing the lease, but it's an industrial nation suffering deeply from the loss of exports. Eventually it'll have to give in.
Some scream "Treasury bubble!" May very well be, but in a deflationary times treasuries are the equivalent of fully insured bank account. Banks can collapse, and unless FDIC covers the deposit, the access to money could be limited, or delayed. Treasuries have the minimal amount of risk. That's why people are willing to buy them. That's why the demand for them has increased.
Deflation is here to stay. Unemployment and defaults of all kinds are going to increase through 2009. With more people looking for work there is not going to be an increase in the supply of loans. There aren't going to be any wage increase spirals (greater supply of labor will reduce the cost of it, not increase it). The unemployed aren't going to buy new cars or new houses. They're going to tighten up their belts and reduce consumption. In order for the inflation to happen, the money has to go somewhere to form a bubble. Currently it has nowhere to go.
If I am to make guesses as to where the next bubble might originate, the bets are on green tech, though I might have to wait for another few years before investing my money again. Commodity delfation - the fall in the price of gas and oil is making every alternative much less competitive and economically viable. Look at the Ethanol industry - it is dead. Completely dead.
Inflation will eventually be here. Deflation will expose more bad debts, but they will eventually get eliminated from the pool. The confidence will be restored and the money that's sitting in buckets will begin to flow. I'll go back into physical precious metals then.
I keep 15% in precious metals (exclude industrial platinum) right now just in case, cause they do well in both, inflation and deflation. I'm re-evaluating the situation on daily basis. The market turmoil makes long term forecasting difficult.
The scenario is - deflation followed by inflation. The more bailouts happen, the longer the market will remain oversupplied and the longer the deflation will stay. The question is not what the sequence of events is, but the timing. Nobody knows the exact timing.
For 2009 I'd recommend staying in cash, then thinking about investing. If housing is your thing, don't expect it to recover for at least another 3 years and even when it does, the rise in value won't be worth speculating on. The same bubble rarely inflates twice in a row. - diggafrica, on 01/06/2009, -0/+3yea and high VAT
- robbob, on 01/06/2009, -0/+3common business sense to shut down for a week or two, taking a page out of the chemical sector and only produce based on demand, then shut it down/change course.
- republicker, on 01/08/2009, -0/+3I bet your wearing a john deer hat right now. If you have ever driven a new tundra then you would surely know that there is no comparison. Tundras run circles around ford and chevys in all aspects.
- askjeffro, on 01/06/2009, -0/+3Based on your comments, where are you personally putting your "money" to invest/preserve?
- hamobu, on 01/06/2009, -0/+3VAT?!
- wwwforexsigcom, on 01/06/2009, -1/+4Its not just the Big 3 or United States economy thats effected by the recession, it's everyone.
- BESTenemy, on 01/06/2009, -0/+3Another addition.
We live under the fiat currency system that has outlived its purpose. It was introduced centuries ago by the Central Bank of Britain and later accepted by other governments for the purpose of financing war deficits and more importantly - the colonial expansion. Money needed to grow rapidly to reflect the extreme profitability of risky endeavours.
One might sponsor a naval expedition where the chances of the ship sinking or never returning are high, but so are the potential profits, if it does come back bearing treasure and news of newly conquered lands. One has to be able to expand and contract money rapidly along with such changes. One has to gamble.
What worked then, doesn't work anymore. The system assumes the risk assessment reflects potential gains, but it does not. The money we use depends on constant exponential growth and expansion of credit. Basing the whole existance on the assumption of exponential growth in a fixed environment with limited resources is suicidal. We need 100% reserve banking and market derermined interest rates that do not generate inflation and do not create the boom-bust cycles the Keynesians are trying to convince us "are normal".
Deflation is a normal occurance that should be observed on daily basis in a world where technological advancements continuously improve the efficiency of production. Things should get cheaper. The idea of "price stability" should give way to "price reduction". Healthy rate of inflation is a complete nonsense. The monetary aggregate does not need to expand at all once it is established. - xdre, on 01/06/2009, -0/+3That's because they lay off temp workers they keep on hand for such a purpose instead. I'm not sure that's significantly better.
- inactive, on 01/06/2009, -0/+2W.E. Deming developed a process improvement system which he offered to the American manufacturing companies, which they had no need for of course because american management is 100% perfect, never needing improvement... So then he went to the Japanese (toyota, honda, etc.) and the mind set of the system he created is what keeps them at the top of the game.
http://en.wikipedia.org/wiki/W._Edwards_Deming - 883XL, on 01/06/2009, -0/+2People may hate to admit it, but Chevy pickups are doing pretty well against the competition. However, I'm pretty sure the 2009 Tundras have a little more power and better mpg.
http://www.chevrolet.com/silverado/comparison/ - eastwood24, on 01/06/2009, -1/+3Fixed costs can't be cut, and not all suppliers will have the rainy day funds of Toyota.
- hamobu, on 01/06/2009, -0/+2Now is the time to invest in walking shoes!
- BESTenemy, on 01/06/2009, -2/+4 According to the Austrian school of economics, micromanagement of interest rates and fractional reserve banking cause business cycles through capital misallocation. The overproduction crisis isn't caused by the industrial revolution or increased mechanization, but by miscalculation of the need for capital.
Loans handed out under the non-inflationary 100% reserve banking fully encorporate the entrepreneurial risk, as the lender risks every penny of the reserve he is handing out. Under fractional reserve ratio, the lender only risks a portion of his actual reserve, so he is more willing to expand his leverage and gamble on risky investments. Structured financing (the ability to sell off loans to a 3rd party) further complicates the matter, completely distorting the real risk associated with capital investment.
Our economy has overextended itself, cause the actual market risk was not represented in the business models that the lending agencies operated on. The rating companies that were supposed to guide investors were getting their money from the same agencies that they were "evaluating". There were massive distortions in every aspect of the economy.
Easy money had made it possible for the consumers to buy things they didn't really need, at rates they could not afford. Factories were built to supply products for which no real deman existed. Jobs were generated to service the inflated economy.
Now that the deflation is happening, many still fail to understand the depth of it. When they say: "The economy is going to recover", they compare it to the peak level, implying that was the normal level. In actuality, the "normal level" was the point before the inflation, before the FED lowered the interest rates, before the 70-year old Glass-Steagall got repealed, before the housing bubble, before the NASDAQ bubble, long before.
One only has to study the Japanese recession model to understand where we're potentially headed. Inflationists had been screaming on top of their lungs about all the money being printed. They've been examining M3 out of context. They've missed deflation and they still treat it as a short-term event. Well, if you still think that, bookmark this comment and come back a year from now and we'll chat about the same subject again. - kingmanic, on 01/06/2009, -1/+3Over spending on growth is what got us here. There were a lot of "phantom" growth signals due to a very poorly regulated finance system which drove spending into growth where there wasn't any real demand. Mostly the easy easy credit which came from China as they desperately searched for a place to invest their money.
- s0nicfreak, on 01/07/2009, -0/+2馬鹿
- texodore, on 01/06/2009, -1/+3We've hit bottom, the economy is recovering, we're passing the stimulus passage, nothing to see here, move along.
Seriously, isn't spending money what got us here in the first place? You don't give a crack addict more crack, why are we giving people that lost money more money? - askjeffro, on 01/06/2009, -2/+3Toyota's December sales were down year over year more then Ford or GM's, fyi.
Nissan -30%
GM -31%
Ford -32%
Honda -34%
Toyota -37.5%
BMW -40.2%
http://www.autoblog.com/2009/01/05/by-the-numbers- ...
You are correct that Toyota is in a better position, but lets not underestimate the real impact that the lack of credit liquidity is having on companies, regardless of perceived quality or desirability issues. - lordmike, on 01/06/2009, -2/+3Toyota gets TONS of government funding... They get bailed out every day... and free health care and pensions from the government... must be nice... Not to mention millions of American tax dollars when the taxpayers directly build plants for them here in the US. Toyota's the queen of bailouts!
- theg3neral, on 01/07/2009, -1/+2Now, make a new Supra!
- ryelli, on 01/08/2009, -1/+2Did I say "American Government"? Jackass.
- NathanielJ, on 01/06/2009, -0/+1I really wish people wouldn't make sensationalist and purposefully-misleading headlines for the sake of getting their submission looked at.
- korvan504521, on 01/07/2009, -0/+1Don't live in michigan?
- eShinn, on 01/07/2009, -0/+1Yeah, first to go are the Gaijin.
- joebus, on 01/06/2009, -1/+1Yeah, they shut down the factories in hopes to solve this problem without having to go to Washington to beg for a bailout. That's the difference between Toyota and GM, ford, etc.
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