Toyota Loses $1.7 Billion: What it Means to You

There has been a lot of news about the domestic automakers burning through billions of dollars every month, but today Toyota is announcing that it lost money for the first time in 70 years. The $1.7 billion operating loss is significant, but it’s not close to the amount that GM, Chrysler and Ford have lost over the past few years.

What it does signify is that the global car market is in dire shape and even the strongest companies will be losing money. One analyst quoted by the New York Times says it is only a matter of time before all automakers see similar results. Toyota is predicting even bigger losses through summer 2009.

Supposedly, the company is taking extreme cost-cutting measures at its Japan headquarters like unplugging electric hand dryers in bathrooms.

More significant cuts will include the suspension of operations at new plants such as the Mississippi plant that was slated to build the new Prius. Instead these plants will wait for an economic rebound.

Many production lines will reduce shifts to keep capacity closer to demand, a move that domestic automakers have already made.

Toyota traditionally doesn’t offer major cash-back incentives, but we would expect to see more deals, especially in early 2009 on most of Toyota’s models.

Toyota Expects Its First Loss in 70 Years (The New York Times)

Comments

there goes the resale value. and cutting the hand dryers? seriously.

Looks like the economy is taking its toll on all auto manufacturers, not just the domestic ones.

To put things into perspective Toyota's market cap is $106 Billion, GM's is $1.8 Billion. GM is dead.

Looks like neoconomics is even taking its toll on the most solid of companies.

"To put things into perspective Toyota's market cap is $106 Billion, GM's is $1.8 Billion. GM is dead."

If you evaluate companies by market cap you might as well say Google is bigger than Toyota. Market cap is ONE measure of the size and value of a company. Downing GM doesnt make Toyota's problems go away but you can keep trying. Let me know how it works. If Toyota is in this condition with GM on life support that should tell you something about how bad things really are. Here is the thing, if GM survives this they are going to emerge as a company with a more competitive cost structure that is going to be better equipped to battle Toyota. Same with Ford. Do not expect Toyota to have an easy time going forward.

As long as the UAW is to stay, I have no faith at all to the domestic automakers or the economy of Michigan.

J, you would never buy a domestic anyway so who cares where your faith lies? Aw, your just still grumpy because you can't figure out who keyed your car and you want to blame it on a Union worker, nice conspiracy theory.

"As long as the UAW is to stay, I have no faith at all to the domestic automakers or the economy of Michigan."

The UAW is staying and starting in 2010 their new hires will make much less than new hires at Toyota and Honda plants in the US. If you hate unions I assume you wont buy imported cars made by union workers in Germany or Japan. To not buy a car because you hate the workers who made the car is just stupid.

Bloke,
First of all, I have no idea how you could have linked the 2 together just like a child's argument.
Read, and just shut your mouth with nonsense.
http://www.autoblog.com/2008/12/15/foreign-autos-vandalized-to-promote-buying-american/
I already know what you are gonna say: They have no evidence that the Ford employees did that.
Well, same goes for the so called "mass destruction weapons" in Iraq. You Americans just don't follow any rules anyway.

sheth,
I don't hate union workers, I just simply despise the existance of the corrupted UAW which does close to nothing but to bring more job cuts to the auto workers.
Don't forget, I live around motown, and a lot of friends and their families work in the auto industry. I could hear more than you wanted to know about how corrupted they are.

J, so you are a non-American idiot, so what? If you don't like the rules in America, or the fact they aren't followed, or the UAW you can always go elsewhere. And so what if you post a link about vandals? I still think you pissed someone off and they came back at you. If your actions are anything like your comments, I am sure of it.

Bloke,

Rules in America? Who are you kidding now? Are there even rules here?
You can think all you want, but the fact is that someone from the UAW had vandalized others vehicle is undeniable, and you are trying to cover that up by making up stories about how those people act; which is just a bunch of BS.

Wow I didn't realize Toyota's market cap was so much larger than GM! This is more proof that Americans like Toyota and don't want anything to do with GM. It is true, GM is in fact dead. That's what you get when you sell garbage products. Bye-bye GM.

J, talking to you is just like banging your head against the wall, so I guess I am just a masochist. You are the one who first spoke about rules and Americans not following them remember? And I am not covering up anything UAW workers did, so they vandalized cars? Sure I believe they did, I don't believe they vandalized your car. Yeah, I made up stories to cover up what the UAW did, HAH!!! I think you actually try and be sensational just so you have something to write on this blog.

Guys... seriously. Post your REAL shoe sizes and move on to the next post.