Even Foreign Car Makers Feeling the Pinch: Toyota Losing Money For First Time Since 1941

One of the largest auto makers in the world, Toyota, has posted their fist losses in seventy years, since the middle of World War Two, in late 1941. Spurred mostly by the global recession that has nearly bankrupted the big three auto makers in the United States, Toyota is acting quickly to assure that they do not meet the same certain fate that the American big three auto makers have succumbed to. And while Toyota operates in union-free plants in the US, with far lower operating costs than other rival auto makers, they have already lost a few billion dollars this year alone, and expect the trend to continue well into 2009. The Economic Crisis Affects Everybody The big three auto makers are not the only auto makers that are feeling their belts tighten. Toyota is also feeling the squeeze as auto makers rush to figure out ways to stave off plunging sales and rising inventories of previous year’s models and manage to find ways to lure consumers back to empty dealerships, where banks are hesitant to even lend money to any of them to purchase new cars. And even though Toyota sold nearly nine million new cars last year, they are expecting to sell far less this coming year as many consumers recoup from a costly holiday season, amid rising bills and costs of living and tantamount to a declining economy where a job is not nearly as secure as it used to be. Why Toyota is Losing Money In an Associated Press interview, which took place on Monday, December 22nd, 2008, the president of Toyota Motor Corporation, Katsuaki Watanabe said, “The tough times are hitting us far faster, wider and deeper than expected. This is an unprecedented crisis requiring urgent action.” Toyota is expected to try and minimize layoffs, as they have a hardened mission statement that is adamantly opposed to laying off full time employees, which is one way that they have managed to circumvent traditional car building union contracts with their domestic plants located in the United States. However, it should also be noted that Toyota is expected to become the number one auto maker in the world during the fiscal year of 2009, as rival auto maker, GM, is expected to cut production drastically as they restructure their company. What They Plan on Doing About It After feeling the pinch to the tune of about a 150 billion yen ($1.66 billion) during the first quarter of the fiscal year of 2008, Toyota is starting to realize that they are not immune to this global financial crisis. The company plans on cutting productions to meet lowering demands, and trying to lower the overall costs of their cars to all consumers while at the same time still offering the traditionally great value and warranty that their customers have grown to expect from them. You can read the full news article that I found HERE – which will give you more information as to why Toyota is losing their butts this year, and what changes they will be making in the future to decrease their losses and realize a true profit margin once more.