Toyota Reportedly Down to $18.5 Billion in Cash

[Intrepidation]

The cash burn rate through 2008 at General Motors, Chrysler and, to a lesser degree, Ford, has been one of the big new stories in the auto business. After a disastrous third quarter, GM was down to about $11 billion and, along with Chrysler, was in danger of having insufficient cash on hand to pay bills at the end of the year.

Meanwhile, Toyota has been raking in the profits for ages now and was thought to have up to $90 billion in reserves as recently as a couple of years ago. The other day, however, John McElroy reported that Toyota may be down to only $18.5 billion in cash with rapidly spiraling debts.

The company has spent heavily on new factories and new products in the U.S. in recent years, but saw its sales plummet as much as the domestics in the second half of 2008. Its total current short-term liabilities are now roughly equal to its total current assets, and its cash reserves put the company on par with Ford. In recent months, Toyota has been moving aggressively to cut costs and budgets have been slashed company wide. The automaker famous for avoiding layoffs was also reportedly considering shedding some jobs in the U.S. and UK, but had denied those reports are true.

Source: http://www.autoblog.com/2009/01/26/toyota-...illion-in-cash/

[siegen]

Well I'll be darned.

Toyota is going to have to lay off workers and cut costs. I wonder if more recalls will follow in the next few years in response to cost cutting, presumably by Toyota using cheaper suppliers and applying more pressure to fewer workers to build the cars.

Nobody is immune to this crysis, but to think Toyota did such poor planning for it shows how greedy they were becoming. Surprised they haven't pulled out of F1, there's a money hole that is providing no real benefit to them. I suppose the "F" Lexus cars would be a marketing blunder if they did pull out of F1 though. Way to dig a hole.

The Tundra, which I assume is one of Toyota's highest profit vehicles, isn't doing so well, and they had so much riding on it (including a whole vehicle plant). That has to be a bit of a disappointment.

And now Toyota is releasing a new Prius which will likely be substantially more expensive than the current, and possibly keeping a decontented version of the current around so that the Insight doesn't cannibalize the hybrid market at a far lower price.

[balthazar]

No, no, no, no! This isn't happening- we've all been assured repeatedly that the supposed amount of toyota's cash was 100% indicative of just how RIGHT they've been about.... EVERYTHING.

Now- overmorgaged & over-expanded, they have nearly the same cash on hand as Ford ????

[Windy-57]

OK, been a while since I posted, but here goes.

I have to listen to the people around me persecute the domestics for the bailout money and I don't think they get that these companies have been doing a lot within their legal rights (franchisee laws, union contracts, etc.) to get back to good. It's just kinda tough when you've been turning a monster size corporation like GM around and then gas prices rise to the extent they did and the credit market falls out from under you - leading to a 40% (or thereabouts) drop in industry sales. And I think Toyota's cash troubles are indicative of just how hard things have been. Toyota didn't make horrible decisions, they just took some short term risk by making some big investments and now, due to these crazy circumstances, are having revenue flow issues.

[gm4life]

Yes this is my good news for the day aside of the goverement wanting to mandate more fuel economy and forcing me to drive a "green car". This is excellent news.

[Daryl Z71]

Yes this is my good news for the day aside of the goverement wanting to mandate more fuel economy and forcing me to drive a "green car". This is excellent news.

I agree. As far as being forced to buy a green car..... I just won't buy anything.

[mustang84]

Oh, how the mighty have fallen! For all the arrogance, all the crap in the media about how Toyota no longer considered GM or Ford competitors, all the "best evers" and bragging about taking over the number one spot.......wow. The same cash reserves as "lowly" Ford? How can this be??

Can't say I feel sorry in the least bit for them.

[DBeaSSt]

But Congress feels that the reason the Domestics are in this situation is because they don't build relevant product.

Could it be that they don't have a clue what they're talking about?

As for the toy's situation, I'm sure the Japanese government will bail them out....

[FUTURE_OF_GM]

Apparently God has been listening to my prayers.

(Nah... That's wrong for me to say)

I'm so happy to see Toyota suffer though

[Robert Hall]

But Congress feels that the reason the Domestics are in this situation is because they don't build relevant product.

Could it be that they don't have a clue what they're talking about?

As for the toy's situation, I'm sure the Japanese government will bail them out....

I wonder if Toyota will ask California, Indiana, Kentucky, Michigan, and Texas for money or more tax incentives, since they have plants/employees in those states...

Edited January 27, 2009 by moltar

[smk4565]

They aren't really suffering, they are the largest automaker in the world and the most profitable auto maker in the world. Their cash reserve has just dropped that is all. They've also been spending a lot on new factories and products; it costs money to grow. They are having a bad year but that is why they kept a big reserve so they could weather a recession without cutting back or delaying anything or taking on more debt.

[smk4565]

According to their balance sheet, Toyota had $23.5 billion in cash and equivalents in March of 2005, so that is about a $1 billion reduction each year, which is probably not due to operating losses, but rather using that cash for purchasing assets or for other expenses. Toyota stock is up 5% today.

[Daryl Z71]

I HATE THEM I HATE THEM I HATE THEM I HOPE THEY FAIL!!! LOL!

[Intrepidation]

They aren't really suffering, they are the largest automaker in the world and the most profitable auto maker in the world. Their cash reserve has just dropped that is all. They've also been spending a lot on new factories and products; it costs money to grow. They are having a bad year but that is why they kept a big reserve so they could weather a recession without cutting back or delaying anything or taking on more debt.

1.) They have only been the largest automakers are of last year.

2.) They aren't profitable if their cars aren't selling.

3.) Guess what? Their cars aren't selling.

[smk4565]

1.) They have only been the largest automakers are of last year.

2.) They aren't profitable if their cars aren't selling.

3.) Guess what? Their cars aren't selling.

From January 08 to September 30th 2008, Toyota had $9 billion in net income. They haven't posted their 4th quarter results yet. Even if they just broke even that quarter, they still would have made $9 billion over 2008 (although their fiscal year runs march to march). $9 billion a year still makes them the most profitable automaker by far.

[Drew Dowdell]

From January 08 to September 30th 2008, Toyota had $9 billion in net income. They haven't posted their 4th quarter results yet. Even if they just broke even that quarter, they still would have made $9 billion over 2008 (although their fiscal year runs march to march). $9 billion a year still makes them the most profitable automaker by far.

I guess you missed the news that Toyota will be posting a loss for 2008.

[capriceman]

did toyota just think that all the lost sales from the rest were going to them? There should be some CEO being flamed right now. How did they not see the ENTIRE market fall like this? I hate toyota as much as the next guy but, Who ever is running the company has no idea how to run it. how come these storys are never in the front pages where today GM cuts 2k jobs is front page? Oh well we all no GM is cutting everything and anything. Show that foreigns are doing bad too. Or show me news where some little girl found here lost dog. At least it will be happy and not depressing.

[evok]

They aren't really suffering, they are the largest automaker in the world and the most profitable auto maker in the world. Their cash reserve has just dropped that is all. They've also been spending a lot on new factories and products; it costs money to grow. They are having a bad year but that is why they kept a big reserve so they could weather a recession without cutting back or delaying anything or taking on more debt.

Toytota relied on the US market and the favorable yen-dollar exchange rates to generate much of their profit.

In case you missed it, the US market collapsed. For a company the size of Toyota $18 billion is not a lot of money if the report is accurate. I happened to believe it is.

In the current economic conditions, a 6 billion dollar cash drain in a couple quarters is very possible if they do not turn off the product spending.

By my estimate Toyota needs $12 to 14 billion on hand at any one time.

[FUTURE_OF_GM]

They aren't really suffering, they are the largest automaker in the world and the most profitable auto maker in the world. Their cash reserve has just dropped that is all. They've also been spending a lot on new factories and products; it costs money to grow. They are having a bad year but that is why they kept a big reserve so they could weather a recession without cutting back or delaying anything or taking on more debt.

Wow...

That sounds almost as naive as many GM fans (including myself) circa 2005.

Talk about 'justifying'

Edited January 27, 2009 by FUTURE_OF_GM

[smk4565]

I guess you missed the news that Toyota will be posting a loss for 2008.

Toyota expects a $1.7 billion operating loss for the 4th quarter of 2008 (calendar year). An operating loss isn't going to translate directly to net income, because of taxes, depreciation, and other forms of ancillary income. The quarterly hit will probably be close to 1-1.5 billion in actual losses, so they are still making $7.5-8 billion in profit.

[Intrepidation]

Toyota expects a $1.7 billion operating loss for the 4th quarter of 2008 (calendar year). An operating loss isn't going to translate directly to net income, because of taxes, depreciation, and other forms of ancillary income. The quarterly hit will probably be close to 1-1.5 billion in actual losses, so they are still making $7.5-8 billion in profit.

Based on numbers you are pulling out of your ass...again. Tell me, does it get sore after a while? I mean you do it so often...or do you get used to it eventually?

[balthazar]

What happened to the supposed 90-100 billion in cash toyo reportedly had ???

Is the loss in the last few years really 70 billion instead of a "mere" 20 billion ??

On a 2-yr string of continual recalls, this is absolutely fascinating....

[smk4565]

On 3/31/05, Toyota had $16.6 billion in cash, so they actually have more cash today. Toyota had another $6.7 billion in short term investments in 2005. So it goes beyond just cash, but how their assets are diversified. Some if it could be traced to the exchange rate of the Yen as well. In 2005, Toyota had $272 billion in total assets, today they have $363 billion, their asset position is strong, even if cash and short term investments are down a little bit. If they are able to continue their record R&D spending while all the other automakers cut back, when this recession ends they will be in a better position than many of their rivals. I don't like Toyota products and wouldn't buy one, but looking at their income statements and balance sheets from the past 4 years, they are still financially strong.

GM by comparison has $51 billion in cash on January 1, 2005 and now they are down to under $10 if you don't count the government loan money. GM went from $480 billion in assets to $150 billion in the past 4 years (likely due to GMAC sale), the General is shrinking fast.

[Drew Dowdell]

Or... ya know.. the value of those assets changed.

[FAPTurbo]

Nobody is immune to this crysis, but to think Toyota did such poor planning for it shows how greedy they were becoming.

I see what you did there.

[Intrepidation]

source

   /sɔrs, soʊrs/ Show Spelled Pronunciation [sawrs, sohrs] Show IPA Pronunciation

noun, verb, sourced, sourcing.

–noun

1. a book, statement, person, etc., supplying information to show proof of your claim.

[mustang84]

They aren't really suffering, they are the largest automaker in the world and the most profitable auto maker in the world. Their cash reserve has just dropped that is all. They've also been spending a lot on new factories and products; it costs money to grow. They are having a bad year but that is why they kept a big reserve so they could weather a recession without cutting back or delaying anything or taking on more debt.

Yeah...I guess the management shakeup and sudden replacement of Katsuaki Watanabe with Aiko Toyoda as CEO is indicative of a company that isn't suffering.

[gm4life]

Oldsmobloi is right on this. Toyota had poor planing just like GM. They deserve this those greedy anti-American bastards.

[siegen]

source

   /sɔrs, soʊrs/ Show Spelled Pronunciation [sawrs, sohrs] Show IPA Pronunciation

noun, verb, sourced, sourcing.

–noun

1. a book, statement, person, etc., supplying information to show proof of your claim.

Source........... like Wikipedia?