Toyota projects first operating loss since 1941

[notadmblnd]

Crashing auto demand, especially in its key U.S. market, and the profit erosion from a surging yen proved too much for Japan's top automaker, which had been booming on the success of its fuel-efficient models, including the Camry sedan and Prius gas-electric hybrid.

Watanabe and other executives said production plans and other investment will be on hold, including a new plant in the southern U.S. state of Mississippi and expansion plans in India.

At a similar news conference last week, Takeo Fukui, president of No. 2 Japan automaker Honda Motor Co., also lowered profit and sales forecasts and declined to give a vehicle sales goal for 2009.

Toyota said it will reduce temporary workers at its Japan plants to about 3,000 by March from an earlier 6,000. Full-time employees will have job security.

Toyota is a relatively old-style Japanese company that offers lifetime employment, and only in recent years has hired and let go of temporary workers to adjust production. It was reviewing overseas jobs but had not reached a decision, it said.

http://finance.yahoo.com/news/Toyota-projects-first-apf-13892463.html

[NNN0LHI]

1. Its the unions fault

Oh, wait a minute ...

Don

[Zenlitened]

6. LOL. It does get confusing, doesn't it?

If we believe in motherhood, apple pie and a heartfelt love of Old Glory... then we must proudly insist that corporate executives in Tokyo determine wages for American workers, right?

Crazed. Republicans have taken 'cognitive dissonance' to absurd new heights -- or depths -- yet again. :crazy:

[bluecollarcharlie]

9. Not just them. Look around here.

Some of the cognitive dissonant reside here, too.

[itsrobert]

2. They need to stop making cars nobody wants

Like the Tundra, Tacoma, Highlander, FJ Cruiser, Land Cruiser, etc. Many of their cars/trucks are among the worst gas guzzlers. And, if you buy from them, you are not supporting the unions.

[DainBramaged]

11. Everybody wants those, don't ya know

Pretty soon, you buy a Land Schooner, you get a Peeus for free.

[Zenlitened]

3. The obvious solution is that the UAW needs to make more concessions.

Damned unions, wanting their members to make a good living! That's not the Japanese-- er, Amurkin way!!!11

:crazy: :crazy: :crazy:

[Double T]

4. Toyota needs a super high mileage combustion engine vehicle.........

at a reasonable price for the economy that lies ahead. Don't get comfortable with the current gas prices; inflation and OPEC will ramp up gas prices again soon. Toyota does a lot of things right and a 'peoples car' should not be a problem for their engineers.

[notadmblnd]

5. But they should be laying off their workers and demanding they take pay cuts

obviously, if they're losing money, it has to be the lazy, overpaid employees fault.:sarcasm:

[bluecollarcharlie]

7. Hey ,now! Hold up wait a minute!!!!

You can't say that. You can't go around pointing out the apparent hypocrisy of people around here by bringing attention to Toyota's gas guzzling vehicles. You sure as hell can't point out that Toyota has temporary workers or an older workforce or has to put off building investments. And you for damn double sure as hell can't point out or bring attention to the fact that Toyota is having trouble in this economy, Honda is having trouble in this economy and that the U.S. automakers, by definition, were right.

You can't say that. Not on a so-called "progressive" forum full of foreign automaker supporters. You know, the people who seem to think that the sun shines out of Toyota's ass. People around here will lose their shit.

[LanternWaste]

10. Self delete.

Self delete.

[Kalyke]

16. Hee hee...

:thumbsup:


(BTW, I kept telling people on this board that Toyota was tanking and they didn't believe me)

[DainBramaged]

8. Toyota needs to close factories and get rid of workers to return to profitability

and dump the retirees. Oh wait, they only have about 2000 in the US, no big savings, maybe i's their greedy management who should all be fired.

[deaniac21]

12. Somehow I can't beleive they posted gains in 1945.

[bluecollarcharlie]

13. You know i was wondering what that profit statement looked like

in 1945,'46,'47.

[deaniac21]

14. Maybe they made a profit selling ashes.

[Statistical]

15. Apples vs Oranges. (Continuing Operating Loss but still profitable)

Toyota expects to lose money on an operating basis of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009.

Toyota lowered its net profit forecast to just 50 billion yen ($555 million) for the year through March 2009 -- a tiny fraction of the 1.7 trillion yen it earned the previous fiscal year.

So TM projects an operating loss for FY08 (toyota's year end Mar-09). To compensate they cut costs, lowered production, terminated temp workers, aka tightened the belt and WILL STILL POST A PROFIT OF $555 million.

Apples to Apples comparison of the two companies:
GM
--------------------------------
2001 0.6B (0.7% profit margin)
2002 1.7B (1.1% profit margin)
2003 3.8B (1.5% profit margin)
2004 2.8B (1.4% profit margin)
2005 -10.4B
2006 -2.0B
2007 -38.7B
2008 -22.7B (includes estimate of -4.1B for Q4 2008)

Toyota (years end in March of following year)
--------------------------------
2002 5.3B (3.9% profit margin)
2003 7.1B (4.8% profit margin)
2004 11.0B (6.7% profit margin)
2005 11.7B (6.5% profit margin)
2006 13.9B (6.9% profit margin)
2007 17.1B (6.5% profit margin)
2008 0.5B (0.2% profit margin)

Toyota
--------------
Total Assets: $320 Billion
Total Liabilities: $200 Billion
$320 - $200 = $120 B in value

GM
-------------
Total Assets: $110 Billion
Total Liabilities: $170 Billion
$110 - $170 = NEGATIVE $60B in "value"

The economic crisis made things worse but Toyota will still post a profit. An incredibly small 0.2% profit but they are still in the black. GM was losing far more since 2005.

To pretend the companies are in the "same boat" is just denial.

For anyone who thinks GM is a well run company buy GM bonds. Don't buy the stock (it's worth -60B right now). Buy bonds. They are yielding 39%. $10K locked in at 39% for 10 years = $270,000. GM doesn't even need to do well they just need to not fail and pay the interest on time. Anyone want to make quarter of a million dollars? Pretty nice retirement IF GM survives.

[Kalyke]

17. Toyota also has subsidizes from the government.

Japan foots some of the R&D bill and has socialized health care for employees in Japan. And local American governments give them tax breaks out the wazoo.

How 'bout them apples?

[Fumesucker]

19. The US has subsidized auto development also...

http://en.wikipedia.org/wiki/PNGV

The Partnership for a New Generation of Vehicles was a cooperative research program between the U.S. government and major auto corporations, aimed at bringing extremely fuel-efficient (up to 80 mpg) vehicles to market by 2003. The partnership, formed in 1993, involved 8 federal agencies <1>, the national laboratories, universities, and the United States Council for Automotive Research (USCAR), which comprises DaimlerChrysler, Ford Motor Company and General Motors Corporation. On track to achieving its objectives, the program was cancelled by the Bush Administration in 2001 at the request of the automakers, with some of its aspects shifted to the much more distant FreedomCAR program.

Edited to add: The difference between the Japanese and American auto maker is that Toyota actually produced the Prius while the big three shitcanned the results of their government funded research.

[notadmblnd]

18. No it's not aples and oranges. More like apples and apples.

GM may be more like a Granny Smith while Toyota is perhaps a Fuji? The only difference is the variety. No one said they were in the same boat. I posted similarities and the hypocrisy. Like Clinton said "It's the economy, stupid." How long do you think the foreign makers are going to remain profitable in this climate? Blaming the problem on the workers and the union is simply bullshit.

[ContinentalOp]

20. So given the same set of economic circumstances...

One company is on the verge of bankruptcy and begging Congress for a bailout, while another is showing their first operating loss in 67 years? And the GM defenders really want to make this comparison? :shrug:

It's not about the workers, it's not about legacy costs, it's not about Toyota using cheap non-union labor, it's about GM's poor management plain and simple.

[DainBramaged]

21. It's the workers, they must reduce their wages to come down to the same as the UAW

OOPS, they already got rid of the temps they hire with no benefits. Guess they need to sell mroe of those profitable Hybrids. OOPS, gas is under $2 a gallon, guess that ain't looking to good either.


TIME FOR A BAILOUT.

[Statistical]

22. Or like a well run company they have substantial cash reserves

Their operating loss was only $1.7 Billion.
Toyota is sitting on about $25 billion in cash & short term investments.
They are also owed another $75 in accounts receivable.

So even with a burn rate of say $3.5 Billion (double their FY08 OPERATING loss) they have enough cash to "ride out" 28 bad years.

Also Toyota has a $2.57 dividend. That 4.0 Billion a year. If things got drastic Toyota could cancel the dividend.
That frees up $4.00 plus a cash flow reserve allowing $3.5 billion per year.

With a credit rating of AAA Toyota is not in danger of being able to refinance it's debt.

Toyota could be in the red to the tune of $7.5 billion a year for around 20 years and then maybe they would be in the same situation as GM.

[DainBramaged]

24. So, you are a Toyota defender? It seems you always have a little tidbit

to remind us how wonderfully the Japanese companies are run. You wouldn't be working out of Senator Shitheel, uh, Shelby's office now would you?

[Statistical]

26. Toyota doesn't need any defending.

However GM does need help.

I think GM can be profitable again but pretending their is no systemic problem with GM will only guarantee that GM fails eventually.

Acceptance is the first step in resolving a problem.

We can keep pretending nothing is wrong with GM.
We can pretend everything was going fine until the credit crisis.
We can pretend that GM is competitive.

If we do that likely we will NEVER see the Volt (a vehicle I am interested in buying).

GM needs to accept some reality and likely it will take public opinion for force GM to see the light.

It is not the workers fault, I never said that.
* GM leadership should go. Some of them have been there 20 years and helped managed the loss of hundreds of billions in shareholder wealth.
* Bond holders will need to accept a reduction in face value. They won't like it but a reduction is necessary to allow GM to pay interest and refinance
* GM will have to sell off competing brands. Having Buick & Cadillac and selling 50K vehicles of each instead of 80K of one is killing economies of scale. GM likely needs to cut half of their brands. UAW & Managwment won't like that.
* GM needs to plan for REALISTIC volume. Toyota projection over next 5 years is 14 million vehicles sold. GM projection is 18.5 million. If Toyota is wrong then they are undercapacity and didn't make as much $$$ as they could. If GM is wrong they will build way to many vehicles.
* If sales & marketshare will decline workforce has to decline. Likely a pay cut will happen also.

We can pretend that GM can keep it's current bloated 1980 supply base and workforce based on marketshare % and total vehicle market than is not sustainable. Eventually taxpayers will give up and GM will fail. Who does that help?

[DainBramaged]

27. All things that have been said here before, many times but we don't run GM

so I guess we will have to see what we can see.

[Sgent]

23. Facts

-10.5B
-1.5B
-38.7B

That is GM's profits from the last 3 years (not including this one).

11.7B
13.9B
17.1B

That's Toyota's profits for the last three years.

Seems Toyota is a well run company that had a bad year. Seems like GM is a bankruptcy waiting to happen.

[DainBramaged]

25. Seems like you want GM to go bankrupt, how American of you.