.Toyota says it's no longer profitable in North America
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.Toyota says it's no longer profitable in North America
http://www.detnews.com/article/20090...+North+America
Washington -- Toyota's top executive in the United States said Monday the company was reviewing its entire operation here, including whether to close a factory in California and when to open a factory in Mississippi.
In an hour-long interview with reporters at Toyota's Washington office, Yoshimi Inaba said Toyota is not profitable in North America despite cost cutting in the organization, but he said he hopes the company could be profitable in its next fiscal year in North America. Inaba, who is president and chief operating officer of Toyota Motor America and chairman and CEO of Toyota Motor Sales USA, is taking up his responsibilities at a crucial time for the Japanese automaker.
Toyota's sales have fallen 38 percent in the first six months of the year -- to 770,000 cars and trucks from nearly 1.25 million vehicles in the first six months of 2008. U.S. industry auto sales fell 35 percent in the first half of the year.
Among the issues the company is considering in its re-evaluation process is whether to keep open the 25-year-old New United Motor Manufacturing Inc. assembly plant in Fremont, Calif. The plant, which employs 4,700 people, is a joint venture formed with General Motors, but the Detroit automaker recently withdrew from the pact during its stay in bankruptcy court.
"That put us in a very difficult position," Inaba said. "We are carefully evaluating all the options."
He didn't commit to a timetable for a decision on Nummi, but said a decision would be made "quite soon." He said Toyota hadn't received an incentive package from California yet.
The hourly workers at Nummi are represented by the United Auto Workers, and the contract expires next month. Inaba said the UAW contract "is one consideration, but not the single deciding factor."
Inaba noted that California is Toyota's single biggest market in the United States, and closing the factory would negatively impact its image there.
The company also is contemplating what to do with its Mississippi plant. Toyota has completed the structure, but not moved equipment into it or given a date it might open because of the sharp decline in auto sales. It was scheduled to open next year. Toyota has said it may build the Prius in Mississippi, but Inaba said those plans are unclear.
Asked whether Toyota could shelve its Mississippi plant permanently, Inaba said, "I hope not," and added, "I'm not that pessimistic" about its future.
"Toyota is certainly at a crossroads with respect to capacity," said Michael Robinet, vice president of global forecast at CSM Worldwide. "Virtually every manufacturer is stepping back and looking at their capacity."
Inaba refused to rule out layoffs or plant closures at its other North American plants.
Inaba said the company had made mistakes in making too many decisions in Japan, urging more "decentralization" of decision-making.
Because of Toyota's success for the last eight years, there was an attitude among some executives that, "OK, now we have been so successful, we understand the market, so can make a decision there rather than here," Inaba said.
Inaba said the company is listening to the market, and customers "had been a little bit lost."
When asked whether Toyota had become complacent, he said, "Complacent or arrogant -- a lot of people use that -- I don't know," he said, adding that the company had tried to guard against those qualities.
Inaba acknowledged that Toyota vehicles had often lacked "passion" and that the company's vehicles must be "more exciting, more nimble."
"Toyota is a good car but not exciting. Those are the comments we usually (or) always get," Inaba said.
Inaba said he supported the decision of the U.S. government to rescue General Motors Co. and Chrysler Group LLC with $65 billion in loans. "Stepping into Chrysler and GM was a necessary step for the government, for the country," Inaba said.
But he said he hoped the U.S. government would have a "free-market level ground in mind in deciding what to do next."
He also said GM and Chrysler were right to shrink their dealer networks. Toyota, he said, has no plans to expand its dealer network in the U.S.
In an hour-long interview with reporters at Toyota's Washington office, Yoshimi Inaba said Toyota is not profitable in North America despite cost cutting in the organization, but he said he hopes the company could be profitable in its next fiscal year in North America. Inaba, who is president and chief operating officer of Toyota Motor America and chairman and CEO of Toyota Motor Sales USA, is taking up his responsibilities at a crucial time for the Japanese automaker.
Toyota's sales have fallen 38 percent in the first six months of the year -- to 770,000 cars and trucks from nearly 1.25 million vehicles in the first six months of 2008. U.S. industry auto sales fell 35 percent in the first half of the year.
Among the issues the company is considering in its re-evaluation process is whether to keep open the 25-year-old New United Motor Manufacturing Inc. assembly plant in Fremont, Calif. The plant, which employs 4,700 people, is a joint venture formed with General Motors, but the Detroit automaker recently withdrew from the pact during its stay in bankruptcy court.
"That put us in a very difficult position," Inaba said. "We are carefully evaluating all the options."
He didn't commit to a timetable for a decision on Nummi, but said a decision would be made "quite soon." He said Toyota hadn't received an incentive package from California yet.
The hourly workers at Nummi are represented by the United Auto Workers, and the contract expires next month. Inaba said the UAW contract "is one consideration, but not the single deciding factor."
Inaba noted that California is Toyota's single biggest market in the United States, and closing the factory would negatively impact its image there.
The company also is contemplating what to do with its Mississippi plant. Toyota has completed the structure, but not moved equipment into it or given a date it might open because of the sharp decline in auto sales. It was scheduled to open next year. Toyota has said it may build the Prius in Mississippi, but Inaba said those plans are unclear.
Asked whether Toyota could shelve its Mississippi plant permanently, Inaba said, "I hope not," and added, "I'm not that pessimistic" about its future.
"Toyota is certainly at a crossroads with respect to capacity," said Michael Robinet, vice president of global forecast at CSM Worldwide. "Virtually every manufacturer is stepping back and looking at their capacity."
Inaba refused to rule out layoffs or plant closures at its other North American plants.
Inaba said the company had made mistakes in making too many decisions in Japan, urging more "decentralization" of decision-making.
Because of Toyota's success for the last eight years, there was an attitude among some executives that, "OK, now we have been so successful, we understand the market, so can make a decision there rather than here," Inaba said.
Inaba said the company is listening to the market, and customers "had been a little bit lost."
When asked whether Toyota had become complacent, he said, "Complacent or arrogant -- a lot of people use that -- I don't know," he said, adding that the company had tried to guard against those qualities.
Inaba acknowledged that Toyota vehicles had often lacked "passion" and that the company's vehicles must be "more exciting, more nimble."
"Toyota is a good car but not exciting. Those are the comments we usually (or) always get," Inaba said.
Inaba said he supported the decision of the U.S. government to rescue General Motors Co. and Chrysler Group LLC with $65 billion in loans. "Stepping into Chrysler and GM was a necessary step for the government, for the country," Inaba said.
But he said he hoped the U.S. government would have a "free-market level ground in mind in deciding what to do next."
He also said GM and Chrysler were right to shrink their dealer networks. Toyota, he said, has no plans to expand its dealer network in the U.S.
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Joined: Nov 2001
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From: NC
Love it!
This is NOT a good thing for Toyota since the MAJORITY of their profits come from North America.
And as for the "we have plenty of money" comment... Yep, heard that one before... (Rewind the clock back to GM in 2005-2006)
This is NOT a good thing for Toyota since the MAJORITY of their profits come from North America.
And as for the "we have plenty of money" comment... Yep, heard that one before... (Rewind the clock back to GM in 2005-2006)
Last edited by FUTURE_OF_GM; Jul 21, 2009 at 10:50 AM.
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Regarding the possibility of closing the NUMMI plant in California ... given how very much anti-car the government of California is, they certainly don't deserve the economic benefits of an auto plant, IMO.
Or else they should produce their biggest, thirstiest, most carbon-spewing models possible there.
Or else they should produce their biggest, thirstiest, most carbon-spewing models possible there.
Last edited by R377; Jul 21, 2009 at 11:15 AM.
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Posts: 10,285
From: Albany, NY
They grew too much too fast. Once you make it to the top the only place to go is down. Tundra must be costing them a lot. It is selling worse than the old 7/8ths Tundra yet they planned for volume to be 2-3 times the old truck. It just hasn't been the sales success they had hoped for.
I'm glad to see it is not just American companies
I'm glad to see it is not just American companies
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From: Oakland, California
Actually the "anti-car" California legislature was just last week discussing incentives which would provide cost savings for Toyota to keep the plant open.Some people forget that California was the birthplace of hotrodding and the greenies are a vocal minority of the population that live in the extreme northwestern part of the state.
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From: Roseville, MI, USA
I remember 3, 4 years ago when I was at C&G I penned a piece that said Toyota cannot maintain their growth. I said at the time Toyota was growing to be "too big too soon." I was laughed at (like I normally am) for making those claims at the time but in the end the jokes on everyone else.
Seems like I was right.
Toyota is in serious trouble.
Seems like I was right.
Toyota is in serious trouble.
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From: New Haven, CT
I read in MT that the only profitable companies right now are VW and Subaru, although their profits are very slim.
Love the acknowledgement of cars that have no passion......pushing for a low volume Supra in the future maybe?
Love the acknowledgement of cars that have no passion......pushing for a low volume Supra in the future maybe?
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Posts: 9,705
From: Oakland, California
While several here are dancing in the street at the thought of Toyota's demise, take note of one of Inaba's comments:
'But he said he hoped the U.S. government would have a "free-market level ground in mind in deciding what to do next."'
Doesn't that sound like he's hoping that the US government will now provide "support" to foreign automakers with manufacturing facilities in the US to "level the playing field."
'But he said he hoped the U.S. government would have a "free-market level ground in mind in deciding what to do next."'
Doesn't that sound like he's hoping that the US government will now provide "support" to foreign automakers with manufacturing facilities in the US to "level the playing field."
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Joined: Aug 2000
Posts: 6,165
From: Sterling Heights, MI
I remember 3, 4 years ago when I was at C&G I penned a piece that said Toyota cannot maintain their growth. I said at the time Toyota was growing to be "too big too soon." I was laughed at (like I normally am) for making those claims at the time but in the end the jokes on everyone else.
Seems like I was right.
Toyota is in serious trouble.
Seems like I was right.
Toyota is in serious trouble.
Registered User
Joined: Nov 2000
Posts: 2,712
From: Ontario
Actually the "anti-car" California legislature was just last week discussing incentives which would provide cost savings for Toyota to keep the plant open.Some people forget that California was the birthplace of hotrodding and the greenies are a vocal minority of the population that live in the extreme northwestern part of the state.
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Joined: Nov 2000
Posts: 16,176
From: Chicagoland IL
Well of course, that's the hypocrisy of government. When things are going good, push the automakers around, force them to sell cars no one wants, force them to develop special models just for your market, or not allow them to sell others ... but then when the economic impact of all that meddling starts to hit home, and more importantly, starts to hit the government coffers and impact representatives' abilities to get re-elected, now they want to help out. How about instead of some kind of aid package, they get rid of CARB and every other anti-automobile piece of legislation they've enacted. Heck, axing CARB alone ought to save taxpayers millions.
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Joined: Mar 2001
Posts: 954
From: Shelton, WA
Wow, I can't believe they said that they can't be profitable in the world's largest automobile market - after all the money they've made here. Waaaaa-***king waaaaaa.
Maybe they don't need to be here, seeing as they're losing so much money and all. Could you imagine the size of GM/Ford/Chrysler corporate parties if Toyota left the US auto market?
Maybe they don't need to be here, seeing as they're losing so much money and all. Could you imagine the size of GM/Ford/Chrysler corporate parties if Toyota left the US auto market?