U.S. Automakers Not Alone – Toyota Facing First Loss in 70 Years

U.S. automakers, facing ruin at the hands of overly-generous union contracts, have made news over the past several weeks as their CEOs have lobbied Congress for help. Now, Japanese-based Toyota Motor Corp. is facing its first operating loss in 70 years, indicating that the troubled economy is affecting more than just the poorly-run U.S. car companies. Despite that bad news, however, Toyota is still on track to edge out General Motors Corp. as the number one world auto manufacturer in 2008, quite a feat. The Japanese company reported 7.05 million cars sold worldwide during the first three quarters of 2008, while GM posted a total of 6.6 million for the first three quarters.

George Magliano, an analyst with HIS Global Insight, noted of Toyota: "They’re going to grow and outstrip General Motors, there’s no way around that." Toyota’s president, Katsuaki Watanabe, speaking at a press conference at the company’s headquarters in Nagoya, Japan, noted, "The tough times are hitting us far faster, wider and deeper than expected. This is an unprecedented crisis requiring urgent action."

Despite the company’s struggles, Toyota Motor Corp. has no intention of laying off employees, even though production will be cut as the company braces for the tough times ahead. The company is also putting on hold plans to launch expansion plants, primarily due to the large drop in U.S. demand for automobiles. Sona Iliffe-Moon, spokeswoman for the company’s U.S. arm, noted that Toyota has not had any layoffs since the 1950s, saying, "As a result of that experience, it became a part of our culture to ensure employment and stability for employees." If U.S.-based automakers - and their employees - aren’t paying attention…they should be.