Toyota chief fears GM, Ford demise

from cnnfn.com

CEO says U.S. policy may turn against Japanese automakers if American carmakers collapse.

June 8, 2005: 7:05 AM EDT

OSAKA, Japan (Reuters) - The outspoken chairman of Toyota Motor Corp. said on Wednesday he feared the possibility that U.S. policy could turn against Japanese auto makers if local giants such as GM and Ford were to collapse.

"Many people say the car industry wouldn't revisit the kind of trade friction we saw in the past because Japanese auto makers are increasing local production in the United States, but I don't think it's that simple," Hiroshi Okuda told a news conference.

"General Motors Corp. (Research) and Ford Motor Co. (Research) are symbols of U.S. industry, and if they were to crumble it could fan nationalistic sentiment. I always have a fear that that in turn could manifest itself in policy decisions," he said, speaking as the head of the nation's biggest business lobby, the Japan Business Federation.

Okuda, who as chairman is removed from the automaker's day-to-day operations, raised eyebrows and invited criticism on both sides of the Pacific when he said two months ago that Toyota should think about ways in which it could aid U.S. auto makers -- such as by raising product prices -- as they reel under massive health-care costs and sliding sales.

In the latest sign of tough times at Detroit's Big Two, GM Chief Executive Rick Wagoner told shareholders Tuesday of plans to cut at least 25,000 manufacturing jobs and close more U.S. assembly and component plants over the next few years.

Both GM and Ford have been cutting back output as they lose sales to Asian brands led by Toyota, which now controls 13.4 percent of the U.S. car market, the world's biggest.

Asked what he thought of GM's latest restructuring plan, Okuda said: "If you think about GM's current output volume and vehicle lineup, laying off 25,000 to 30,000 employees is inevitable."

GM, the world's biggest auto maker followed by Toyota, lost $1.1 billion in the first quarter and is riding out its worst financial crisis in more than a decade. It has been closing and idling plants over the past four years and will have cut its annual North American assembly capacity to 5 million vehicles by the end of this year from 6 million in 2002.

Meanwhile, top Japanese auto makers are adding jobs and assembly lines in North America to meet growing demand there, prompting executives, including Toyota President Fujio Cho, to dismiss concerns that their success would reignite a political backlash.

 

I'd be concerned too if i was him,didn't Pres. Reagan raise tariffs on Japanese bikes in the '80s to bail out Harley-Davidson? Could the same thing happen again?? I hate that Toyota thinks they have to apologize for their success,you think GM or Ford would think twice about being sorry about running the imports into the ground,they'd probably dance on their grave.
You think americans,the majority,not the fringe zealot Charlie Daniels types,would actually turn on Toyota or would they not care as long as they got a good car,most don't seem to have a problem with Wal-Mart,do you think the majority would care if GM went under? I guess Capitalism is only fun if it works for you,not against you,survival of the fittest,GM and ford are lucky Toyota doesn't appear to want to go in for the kill,or maybe they're just waiting for their moment.

 

In the 80's there were all kind of mini riots over imports. The US should put tarrifs on Japanese imports just because they do it to us in japan. Only whats made here should go tarrif free. That would also encourage more plants here in the US.

 

I wouldn't have a problem if we put the same tariffs on their products here as they put on ours there. That seems fair.

 

thats exactly it.. GM has got a lead on a campaign that will force the Japanese Yen to rise in value.. which would cause a price of a Japanese car to go up in US $. And there are also talks about some tariffs to raise the costs of import cars.

To combat this, Toyota wants to put out the idea that sure, it'll just raise the cost of their cars instead.. so in the end, Toyota cars still cost more.. but Toyota would get the extra cash. instead of being "lost" in currency values or tarrifs.

 

Very good theory. That makes a whole lot of sense.

 

True. Would they rather pay the US tarriffs, or sell a few less vehicles at more profit. I think the latter would suffice.

 

On a side note, I think that the USA should impose tarriffs against countries that impose tarriffs against us. So we offer free trade, but if it is not bidirectional; we tarriff them on equal grounds of what they tarriff us. Might make the "Free Trade" move along alot faster.

 

Right now free trade is a scam to get cheap labor.

 

True to a degree, but cheap foreign labor and etc has kept consumer products and cars much cheaper then they otherwise would be without it. While Im a fan of some form of tariffs but be prepared to see a huge increase in inflation which in the short term will make all the products you buy much more expensive and will squeeze the middle class more then you know.

 

Even if they imposed tarrifs against us it wouldnt make much of a difference since most of the countries in question dont buy alot our products anyways. They don't buy our products for two main reasons; for one our products are inherantly more expensive then products made in china and etc and two many countries around the world are export-only economies and dont have a large enough middle class for us to sell significant amount of products too.

Since many countries around the world are export-only economies they significantly depend on the US economy for their own survival. US imposed tariffs would do far more harm in those countries then it would in our own. I only see tariffs getting enough support with the a majority of the US population if-and-when our economy enters into long recession and GM files for bankruptcy accordingly.

 

Maybe if more American's bought domestic cars it wouldn't even be an issue. If Ford or GM fold it's because "we" don't by domestic cars IMHO. Americans for the most part still perceive that domestic cars are of low quality, which is simply not true today.