Toyota Fears Backlash If U.S. Carmakers Fail

OSAKA, Japan Jun 8, 2005; Reuters reported that the outspoken chairman of Toyota Motor Corp. said on Wednesday he feared the possibility that U.S. policy could turn against Japanese auto makers if local giants such as GM and Ford were to collapse.

"Many people say the car industry wouldn't revisit the kind of trade friction we saw in the past because Japanese auto makers are increasing local production in the United States, but I don't think it's that simple," Hiroshi Okuda told a news conference.

"General Motors Corp. and Ford Motor Co. are symbols of U.S. industry, and if they were to crumble it could fan nationalistic sentiment. I always have a fear that that in turn could manifest itself in policy decisions," he said, speaking as the head of the nation's biggest business lobby, the Japan Business Federation.

Okuda, who as chairman is removed from the auto maker's day-to-day operations, raised eyebrows and invited criticism on both sides of the Pacific when he said two months ago that Toyota should think about ways in which it could aid U.S. auto makers -- such as by raising product prices -- as they reel under massive health-care costs and sliding sales.

In the latest sign of tough times at Detroit's Big Two, GM Chief Executive Rick Wagoner told shareholders on Tuesday of plans to cut at least 25,000 manufacturing jobs and close more U.S. assembly and component plants over the next few years.

Both GM and Ford have been cutting back output as they lose sales to Asian brands led by Toyota, which now controls 13.4 percent of the U.S. car market, the world's biggest.

Asked what he thought of GM's latest restructuring plan, Okuda said: "If you think about GM's current output volume and vehicle lineup, laying off 25,000 to 30,000 employees is inevitable."

GM, the world's biggest auto maker followed by Toyota, lost $1.1 billion in the first quarter and is riding out its worst financial crisis in more than a decade. It has been closing and idling plants over the past four years and will have cut its annual North American assembly capacity to 5 million vehicles by the end of this year from 6 million in 2002.

Meanwhile, top Japanese auto makers are adding jobs and assembly lines in North America to meet growing demand there, prompting executives, including Toyota President Fujio Cho, to dismiss concerns that their success would reignite a political backlash.

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2000 Ford 7.3 Powerstroke 4x4
2006 Mazda Tribute
1983 Black 300 D (donated to charity)
1993 Teal 300 D (160K) Sold
"I love the smell of burnt diesel fuel in the morning, it smells like ....VICTORY"

Semper Fidelis
USMC 1973-1976

In a couple years, China will be exporting cars to the US and other markets, undercutting the Koreans. Its going to get worse. I smell a giant Chrysler type bailout coming soon, at a time when the country can least afford it. Or else GM will be whittled down to making steering columns and transmissions for Honda and Toyota. How sad.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

www.thetruthaboutcars.com

check out the editorials- 'GM death watch' good analysis in my opinion.

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'90 300SE 298k
-300K and it gets put into retirement.
'80 300D 255k Purchased new by family in 1980.

Had a:
1973 220 (gas)
1980 300SD
1992 400E

Remember, Chrysler REPAID their LOAN, ahead of schedule. Nobody gave them a handout, they borrowed money and repaid it, unlike many consumers of today who borrow up to their eyebrows, then declare bankruptcy, leaving the rest of those still employed to clean up their mess.

Chrysler was making military equipment for the government at the time so it was in the national interest to keep the company afloat one way or another. There were no guarantees that the loans would be repaid, but Lee Iacocca was both crafty and lucky, and managed to pull it off. There was lots of room for improvement then, and the minivan and K-cars were successful gambles.

If there is a GM bailout, there will be much bigger challenges than Chrysler had to face. They have no charismatic leadership and there are no new product areas to exploit. GM's product committees abhor innovative thinking.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

GM definately has the most un-inspiring product line imaginable- and they still maintain their age old practice of cloning the same models across all divisions. No wonder they're in big trouble- they should have eliminated Buick and Olds a long time ago.

In my mind, GM does have it's strengths- mainly in terms of build quality. Besides the Benz, we have a lowly '98 Cavalier. Stupid design, ho-hum styling, extremely uncomfortable, rides like a hay-wagon, but hey- we haven't had one lick of problems with that car. Just a muffler, one tie rod end and a front brake job on a 7 year old car. Having owned several VW's most of my life, I'm not accustomed to an affordable car that simply refuses to break down, no matter how much it is neglected.

Occasionally I rent GM cars or SUV's for business trips- brand new of course, so cannot judge reliability, but the newer upscale models do have that look and feel that they're well put together, and would offer the same excellent reliability as our old Cav. Too bad GM can't leverage on this one lingering thread and start making cars that really turn heads like the Chrysler 300 does, and do some brain-work on their interior and ergonomics especially. I also wonder why they don't start bringing Opel's into North Amarica again, offering another small car Diesel option. Now that TDI's are outselling VW's gasoline cars, that would seem to make good business sense.

Dave

1976 300D

yea look at that stupid "bubble truck" they have come out with...

http://www.chevrolet.com/ssr/

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2000 Ford 7.3 Powerstroke 4x4
2006 Mazda Tribute
1983 Black 300 D (donated to charity)
1993 Teal 300 D (160K) Sold
"I love the smell of burnt diesel fuel in the morning, it smells like ....VICTORY"

Semper Fidelis
USMC 1973-1976

I don't think there will be a pro-American backlash. Americans buy based on value. They will choose the best value for their dollar. Nobody cares about GM. I don't even think GM cares about GM. They already killed off the oldest surviving car brand in the country - so much for any sense of longevity. They are letting the Asians and Europeans introduce much of the new techology. I wouldn't be surprised if the top execs simply bail with their golden parachutes, and let the lawyers move in and clean up the remaining trainwreck.

Trouble is, they got burned bad with the Corvair and the Vega. Two cars that looked good on paper but became lawsuit and public relations nightmares. Since then their designs have been pedestrian and non-controversial. Front-wheel drive was a bold move for them.

I thought those neat new 2-seater convertibles would help bring things around, but realistically that is like rowing against a tidal wave.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

GM was the very FIRST US carmaker with front wheel drive (other than Cord in the '30's)- the late '60's Olds Tornado and Cadillac Elderado- how soon we forget! Also, the Chevrolet Citation FWD came along in a timely fashion, and was far better than the Dodge Omni or Ford Escort's at the same time period. I still see some early '80's Citations on the road around here. (I never dreamed I'd find myself defending GM, but hindsight is 20/20).

Corvair was indeed a radically cool design- always wondered why Mr. Nader had such a problem with it, but never condemned the Porsche 911. The Vega was an unfortunate mistake- but no worse than Ford's Pinto / Bobcat. These were the first feeble attempts at small cars by US car-makers.

Dave

They chose to make ****tier and ****tier cars through the years to increase the bottom line.

The more crap you sell the more people you alienate. It caught up with them.

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Pxland

2001 Honda Accord

1995 Jeep Cherokee

1973 MB 280SEL 4.5

Get ready for some more feeble attempts.
Just to show you how stagnant their philosophy is, how does a company fall into the same trap they fell into back in the 70's with gas prices. Is there anybody at GM thinking ahead or do they just cross their fingers and hope for the best? You've got to take some risk and you may alienate some of your long time owners but those guys don't pay the bills you want "new" people to buy the car. Although I hate the car I still admire what BMW did with 7 series even Honda makes radical updates to its bread and butter cars. I swear for years I couldn't tell the differences in newer Grand AMs or newer Buick Regals from their predecessors.

True, GM was no worse than the other domestic makers. They probably had some good ol' boy agreement between them to not tip the solid-axle, leaf-spring body-on-frame apple cart, lest they actually have to learn new stuff and change.

I am encouraged by the new Saturn cars that are coming soon. Hopefully cost-cutting won't turn them into more cheap crap.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

The Corvair's problem was the deletion of a sway bar in back, and severe oversteer when the front tires were overinflated. They only took 18lbs. of air. The later models were good cars, but by then the damage was already done.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma