Toyota's troubles keep growing

[2QuickZ's]

Sarah Webster

Detroit Free Press

Link to original story is HERE . See original story for links to other stories referenced (i'm too lazy to link them)

Is it just me, or do the troubles of Japanese automaker Toyota Motor Corp. seem more American every day?

Sales are down 34% this year. The automaker lost $4.8 billion in its last fiscal year. The company says it might not be profitable again until 2011. Toyota is now cost-cutting and confronting a list of problems that always seem to catch up with global companies that have been around for a while.

Aside from some troublesome brand problems with Lexus, outlined Sunday by Free Press auto critic Mark Phelan, the automaker is also facing a lawsuit that could be a public relations nightmare for the automaker.

What's more, CBS this weekend reported that a former Toyota attorney is accusing the automaker of illegally withholding evidence in hundreds of rollover death and injury cases, in a "ruthless conspiracy" to hide evidence of "its vehicles' structural shortcomings."

Toyota calls the accusations "inaccurate" and accuses the attorney of violating "his ethical and professional obligations."

But regardless of the truth, it's pesky stories like these that nibble away at a company's image over the long haul.

Plant closure won't help Toyota

Toyota still has a lot of cash to fix its problems, and it was the No. 1 beneficiary of the cash-for-clunkers program. But the automaker's decision last week to close its assembly plant in California is probably not going to help its image matters.

Toyota said it would close its New United Motor Manufacturing Inc. plant in Fremont, Calif, in 2010, after General Motors decided to pull out of the 25-year-old joint venture as part of its broad reorganization plan. The so-called NUMMI plant employs 4,500 UAW-represented autoworkers and an estimated 35,000 supplier and other spin-off jobs are expected to be indirectly impacted.

Check out the Detroit-like images emerging out of California in this Reuters report about Toyota's decision.

Images like this, combined with news stories accusing Toyota of bad conduct, might give many consumers, even Toyota loyalists, cause to shop around.

West Coast opportunities

All in all, I'd say Toyota's slippage translates into a grand opportunity for Detroit's automakers in California.

California is the top auto-buying state in the country, largely because of its size and population. So if the Detroit Three are ever going to truly recover in the United States, picking up market share in The Golden State will be critical.

But Detroit's automakers have struggled mightily there for decades.

In many ways, that's the Detroit Three's own fault. They resisted regulatory changes there and too long lagged Japanese automakers in quality and fuel-efficiency.

While the facts have supported a positive shift in the Detroit Three's favor for some time, however, it's been more difficult to make consumers believe.

Given Toyota's stumbles, though, there seems to be an opportunity for the Detroit Three to take back some of the California pie.

Because, as Business Week recently mentioned in its automotive blog, Toyota's "growth days appear to be in the rearview mirror."

Edited August 31, 2009 by 2QuickZ's

[capriceman]

"illegally withholding evidence in hundreds of rollover death and injury cases"

If this is even remotely true than I think The world should ban this company.

[Dsuupr]

For the past 5 years, I've been saying toyota is going the way of the old GM. I've enjoyed the start of the fall and will enjoy the upcoming total free fall. Remember: At first people still bought and believed in GM products.

[Cadillacfan]

For the past 5 years, I've been saying toyota is going the way of the old GM. I've enjoyed the start of the fall and will enjoy the upcoming total free fall. Remember: At first people still bought and believed in GM products.

Couldn't agree more. You'd think they would learn from past history but they're so focused on expanding and being number one, they are the new old GM.

[cire]

Since Toyota doesn't offer any vehicles that remotely appeal to me (neither does Honda for that matter), I can't say that I feel too bad for them.

[daves87rs]

For the past 5 years, I've been saying toyota is going the way of the old GM. I've enjoyed the start of the fall and will enjoy the upcoming total free fall. Remember: At first people still bought and believed in GM products.

Yep.

It sucks to be #1....

Granted, it doesn't solve GM issues, but they pale in comparison.....

[daves87rs]

Since Toyota doesn't offer any vehicles that remotely appeal to me (neither does Honda for that matter), I can't say that I feel too bad for them.

You have to at some point, beacuse American jobs are still a stake.

[balthazar]

>>"You have to at some point, beacuse American jobs are still a stake."<<

American car makers would gladly absorb some of those jobs provided a disproportionate deflation of toyota's sales volume were to occur.

[daves87rs]

>>"You have to at some point, beacuse American jobs are still a stake."<<

American car makers would gladly absorb some of those jobs provided a disproportionate deflation of toyota's sales volume were to occur.

Notgoingtohappen.com

Still waiting to see if China's horrid cars make it over here or not....

[balthazar]

American car makers will never experience an increase of sales ??

And if they do, they won't hire more workers to accomplish raised production ??

toyota is floundering mightily in recent years- that could all melt away... or it could continue to compound upon itself. If the latter, the void in volume will have to be filled by others.