General Motors and Toyota were once neck-and-neck when it came to developing high-mileage gasoline-electric hybrid cars. About a decade ago, you see, both firms had cracked the code on how to engineer a hybrid, and GM even had a running prototype. But the new technology was so costly that the automakers would have had to initially sell hybrids at a loss to build a market for them. The differing paths the two companies took symbolize why Toyota has become wildly profitable in the United States while GM has been losing its shirt in its home market. And why Toyota, riding GM's bumper, is likely to pass it this year to become the world's biggest car company.
In addition to taking different technological paths, Toyota and GM have taken different approaches toward expansion in the U.S. market. Toyota last week announced plans to build a $1.3 billion assembly plant, its eighth in North America, in Elvis Land: Tupelo, Miss. "No company since Henry Ford has grown production at the rate Toyota is," says economist Sean McAlinden of the Center for Automotive Research. GM, by contrast, is closing U.S. plants. It's also overhauling its models to make them more stylish and fuel-efficient. While GM achieved a surprising 3.4 percent increase in sales last month, its biggest expansion hopes hang on a possible purchase of money-losing Chrysler, whose problems are very much like GM's own.
Link: http://www.msnbc.msn.com/id/17440483/site/newsweek