In the midst of all the gloom and terrible preductions, I looked around to see how much cash Toyota has on hand. At year-end 2009, it was $43.09B. The current mess will be costly -- suits for accidents, plus suits for lowering value of currently-owned cars, and sharply lower sales and profits. But I think with that amount of cash, Toyota can ride out the storm -- especially since we don't seem to see the same huge mess across the Atlantic or in Japan Toyota Motor (TM) Cash on Hand
Unless they have to replace the electronics of every car that they installed the drive by wire throttle system in. Depending on the replacement cost, the $43.09B could not be sufficient for the task. Ever wonder why Toyota continues to blame carpets, throttle contraptions and operator stoooopidity? And doesn't release details about the data logging function? So an objective third party assessment could actually be done as to what is causing the problems???? Follow the money.
World-class auto manufacturing is an industry of big numbers. Big income, and big expenses. A few years ago a car company like Toyota needed about $5B minimum in order to continue to develop new product for the future. When Chrysler was purchased by MB, the Germans immediately drained Chrysler's cash accounts. When MB dumped Chrysler, of course that money remained in Germany with MB leaving them unable to develop product. It takes a huge amount of cash to keep these companies going. Draining even a ten billion in lawsuits would be a big hit on Toyota's ability to continue to expand into global markets.
The CBC (Canadian Broadcasting Corporation) is right when it says that Toyota needs a Tylenol's style of visible fix to it's reputation. A emergency engine cut of switch would probably do it... But the big worry is what is really happening here. Given the timing and frequency of issues cropping up and how media visible it all is, I would have to say the simplest explanation is not "coincidence" any more. (The critics claim Toyota's have always had a problem, yet all the best evidence of a problem, revolves around recent incidents.) Thus when you apply Occam's razor, the most likely explanation might be a conspiracy. If there is a conspiracy, Toyota must not only fix it's image problem, it must stop the conspirators. That won't be easy, since most conspiracies don't allow themselves to be so neatly photographed. In other words: they must figure out what this is all about. The most obvious, is that some powers that be, want to see Toyota fail to restore America's automotive dominance. This is an unlikely scenario since even under the worse of publicities, Toyota has enough resources to recover. A less obvious conspiracy which I suggested in another thread is that they are trying to eliminate hybrids by banning electronic throttles. Although such a ban would severely hurt Toyota, Honda and Ford, it would not destroy those companies either. But it will have the effect of leveling the playing field for GM and Chrysler, allowing their current less fuel efficient cars compete. (Since electronic throttles also allow non-hybrids to be more fuel efficient.) If that is the case Toyota has it's work cut out. It would be very difficult to them to fight a ban not directly directed at them but will have severe impact on not only what they are producing, but also on what they can produce in the future. Ultimately it's the future that is at stake, a future which America's "powers that be" is more than willing to sacrifice in the name of preserving their own collective asses. If there is no conspiracy, then Toyota will only need to clear it's name. Things will get better. If otherwise, then more and more things will "crop up". If there is a conspiracy and it's not directed at Toyota, then other car companies will start to have issues too with their throttles too... Only time will tell...
See post in another thread. The 'beauty' of our tax code is that whatever the expense is 40-50% of that cost will be borne by you, Malorn, lots of GM workers and fans, lots of Ford workers and fans, etc, etc, etc. I believe ( unverified ) that I read that Toyota has a $5.5 Billion reserve for issues like this. If they dip into this reserve then it won't affect profitability because this expense has already been accrued in prior years.
The problem is not the cash, it is the revenue stream going forward and the layoffs that will eventually hit toyota. the whole game changes for them.
You're assuming ( incorrectly - again ) that the revenue stream going forward is going to be reduced. Here's a factoid from Toyota that won't make you happy. Last month even though Toyota was down 9% in sales over 2009 and while both Ford & GM were up in sales over 2009....ready....Toyota outsold both Ford & GM on a retail basis. This despite having its top 4 volume vehicles off the market for 2 weeks. Watch out for March. Revenue stream off, my azz. If you accurately stated 'I hope that Toyota's revenue stream is off in the future' then I have no problem with that.
I am talking about for the year, toyota will be off at least 2 percent of market in the US, want to bet?
What will count is what the trend is. To go back to your other incorrect post Toyota doesn't layoff workers. If it lost 2 pts of marketshare in 1st Qtr but by 4th Qtr it's gained it all back ...then nothing happened. It's perfectly analagous to your stock portfolio. If the market falls early in the year and you HOLD, then the market recovers later in the year did you lose anything? No.
AutoNews is on top of things. http://www.autonews.com/apps/pbcs.dll/article?AID=/20100310/RETAIL01/100319988/1400 Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100310/RETAIL01/100319988/1400#ixzz0hpeV0n79 Your poor Toyota friends that you're so worried about in Chicagoland will likely benefit as well as the rest of us. As I've said so many times herein...life moves on.
C'mon bet me. Toyota will see a spike for awhile from the Toyota die-hards taking advantage of the larger incentives, then they will hit the wall. Bet me.
