Toyota Forecasts Its First Operating Loss in 71 Years

[marmar]

Toyota Forecasts Its First Operating Loss in 71 Years (Update3)
By Naoko Fujimura and Tetsuya Komatsu


Dec. 22 (Bloomberg) -- Toyota Motor Corp., the world’s second-largest automaker, forecast its first operating loss in 71 years on plummeting demand, prompting Moody’s Investors Service to consider downgrading the company’s top-rated credit.

The carmaker will post a 150 billion yen ($1.7 billion) loss in the year through March, it said in a statement today, scrapping a previous forecast of a 600 billion yen profit.

“The environment we’re in is extremely tough,” President Katsuaki Watanabe told reporters today in Nagoya. “We’re facing an unprecedented emergency situation. Unfortunately, we can’t see the bottom.”

Moody’s is reviewing the carmaker’s “Aaa” rating on $19 billion of debt, possibly boosting the company’s borrowing costs amid tightening credit markets and the worst U.S. auto sales in 26 years. Watanabe has cut contract jobs, production and executive pay including board-members’ bonuses this fiscal year in a bid to offset slumping demand and a strong yen.

“Toyota’s cost-cutting can’t match plummeting sales,” said Koichi Ogawa, chief portfolio manager at Tokyo-based Daiwa SB Investments Ltd., which manages $28 billion. “Everyone is getting hurt with this situation.”

The automaker lowered its net income forecast 91 percent to 50 billion yen. The last time Toyota posted an operating loss was in the year ended March 1938, said spokesman Hideaki Homma.

The company revised its forecast for a second time even after adding in an expected gain of 130 billion yen from cost- cutting measures, Watanabe said. All capacity expansion projects have been postponed, he said.

Toyota rose to 2,919.41 yen as of 11:07 a.m. in Frankfurt from 2,895 yen at the close of Tokyo Stock Exchange trading. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aIbkwkK56i0g&refer=home

[Romulox]

1. K/R for those still going on about GM. nt

[n2doc]

2. Who knew the UAW was so powerful?

Now they are even taking down the non union companies with their high, high wages! :sarcasm:

[madrchsod]

3. oh no! the mighty toyota has fallen!

i guess it was those greedy unions that dragged toyota down....i guess toyota workers are in for a big wage cut.

[DainBramaged]

4. Someone here will find a reason to blame the UAW or the greedy GM managers

for Toyota's losses. If only Toyota could have sold more of those gas burning SUVs and trucks, then they could have turned a profit.


I guess they aren't being saved by zero.

[DainBramaged]

5. Kick for Made in Americans by the UAW

[LiberalFighter]

6. If Toyota paid non sweatshop wages for the parts AND

paid for all the time their employees worked they would had had an operating loss sooner.

[DainBramaged]

7. Time for unpaid vacatons, what is he world coming to?

:sarcasm: