Toyota is ‘grasping for salvation' as losses continue, Akio says

[got-rice]

http://www.autoblog.com/2009/10/02/r...hape-grasping/
http://www.autonews.com/article/2009...310029966/1210

Toyota is ‘grasping for salvation,' risks 'irrelevance,' chief says
Founder's grandson says company is too big, distant from customers
by Hans Greimel - Automotive News

TOKYO -- Toyota Motor Corp. President Akio Toyoda said his money-losing automaker is “grasping for salvation” as it struggles to return to profit.

The world's largest car company was once targeting annual sales of 10 million vehicles but now expects sales of 7.3 million this year, down from 8.97 million in 2008, Toyoda said at a news conference here today.

Toyoda, grandson of the automaker's founder, said Toyota is on the brink of “capitulation to irrelevance or death” as he prepares for a second-straight year of substantial financial and unit-sale decreases.

Citing the five stages of corporate decline outlined by Jim Collins, author of How the Mighty Fall, the Toyota chief warned that his company has slumped to stage four.

“We are grasping for salvation,” Toyoda said, adding that the company has already spiraled through the first three stages: Hubris born of success, undisciplined pursuit of more and denial of risk and peril.

“Toyota has become too big and distant from its customers,” the chief executive said.

In the United States, Toyota's sales fell 13 percent in September from a year earlier as the market suffered a sharp letdown after the government-funded cash-for-clunkers program ran out. Total U.S. sales tumbled 23 percent. Toyota is down 28 percent for the year.

Currency problems
Separately, Toyoda called the current dollar-yen rate "very tough," saying the weak U.S. currency made it difficult to return to profit on an unconsolidated level.

"When you get to this level, it makes it difficult to return to profit on sales growth alone," he said.

Toyoda repeated Toyota's aim to return to profit at the parent level "as soon as possible," even as it expects global sales to fall 18 percent from 2008 to 7.34 million vehicles this year. That would leave about 30 percent of its production capacity unused.

Toyoda took the helm in June as the world's biggest automaker faced one of its biggest crises in history amid a global credit crunch and an industrywide sales slump that forced two U.S. automakers into bankruptcy.

For the financial year to March, Toyota has projected a consolidated operating loss of 750 billion yen ($8.4 billion), assuming a dollar rate of 92 yen. It has forecast a parent-only operating loss of 600 billion yen.

Recall regret
Presenting a further challenge, Toyota said this week it would recall 3.8 million Toyota and Lexus models in the United States -- its largest-ever recall -- because of a risk that a loose floor mat could force down the accelerator. The problem is suspected of causing at least one crash that killed four people.

“We would like to pay our deepest condolences for the loss of four precious lives,” Toyoda said. But because an investigation into the problem is still underway, he said he could offer no further details about plans to address the issue.

“Customers who chose Toyota and Lexus cars because those brands are safe and secure are now beset with anxiety. I regret and apologize for this development,” said Toyoda, who took office in June and is the grandson of the company's founder.

Helped by incentives
The Prius has helped fuel sales growth at Toyota especially in Japan, where the government is offering two sets of incentives to promote more fuel-efficient cars.

Toyoda said he would welcome an unlikely extension of Japan's cash-for-clunkers scheme beyond next March, while adding that it would not be prudent to keep depending on the government for help.

Shares of Toyota ended down 3.7 percent at 3,380 yen, mirroring a sharp fall in other auto stocks as the dollar traded around 89.40 yen, within sight of an eight-month low of 88.23 yen struck on Monday.

[ECHOKnight2000]

This is interesting. It will see how things will work out. I think its one of those you need to fall before you get up. if Toyota was doing well now I don't think they would have thought of this.

[Sulu]

Is instilling fear Mr. Toyoda's method of motivating the troops and loyal customers? I am not sure that it will work. He may just find that he losing more and more rather than gaining.

[PhatRoyale]

Originally Posted by Sulu

Is instilling fear Mr. Toyoda's method of motivating the troops and loyal customers? I am not sure that it will work. He may just find that he losing more and more rather than gaining.

+1

This is not the way to go about things. If anything, it will speed up the pace at which Toyota will falter as a company. He needs to instill confidence and hope in those who work for his grandfather's company.

[the_professional]

I don't know.
I think he is right, & rather than keep trying to float the Toyota boat as it sinks isn't gonna work. He needs everyone to wake up at Toyota and realize the company is nothing of what it was, as it slowly slips away from its values. I think he hit the nail on the head, no more of this denial bullshit. Get the company in order and lets get it moving, everything is not OK, and Toyota has to realize that, and in effect stop "patting itself on the back". Those days are well gone.

[PhatRoyale]

Originally Posted by the_professional

I don't know.
I think he is right, & rather than keep trying to float the Toyota boat as it sinks isn't gonna work. He needs everyone to wake up at Toyota and realize the company is nothing of what it was, as it slowly slips away from its values. I think he hit the nail on the head, no more of this denial bullshit. Get the company in order and lets get it moving, everything is not OK, and Toyota has to realize that, and in effect stop "patting itself on the back". Those days are well gone.

Good rebuttal, I agree.

[Jegan_V]

He's being very blunt about the problems, not even sugar coating it. Whether it hurts morale or inspires determination is yet to be seen. I actually prefer this way of things, its pretty honest. When I see GM's ad with Mr.Whitacre saying "car for car when compared to the competition...we win, simple as that."well...first thing in my mind is that its dishonest. No car maker could make a statement like that without it being a lie. If I want to be lied to, I'd listen to a politician.

[xpeed]

And this is the same guy that wants to re-image Toyota as a fun, exciting brand again. I just read in Motortrend that Akio-san is in the thinking process of creating a mid-engine sports car again, that similar to of the late MR2/MR-S.

[100$ GUY]

Originally Posted by Sulu

Is instilling fear Mr. Toyoda's method of motivating the troops and loyal customers? I am not sure that it will work. He may just find that he losing more and more rather than gaining.

Originally Posted by PhatRoyale

+1

This is not the way to go about things. If anything, it will speed up the pace at which Toyota will falter as a company. He needs to instill confidence and hope in those who work for his grandfather's company.

Citing the five stages of corporate decline outlined by Jim Collins, author of How the Mighty Fall...

Denial is one of those five stages......

[silver04rollas]

Could this makr the return of the "performance oriented" Toyota company from the 1980s and 1990s when Toyota had 5 - 6 full-fledged sports cars?

[PhatRoyale]

Originally Posted by silver04rollas

Could this makr the return of the "performance oriented" Toyota company from the 1980s and 1990s when Toyota had 5 - 6 full-fledged sports cars?

I doubt it, but I hope I'm wrong.

Over the past few years I've gotten used to seeing Toyota become a spectator in the sports car segment.

[toyotaholic]

“They say that young people are moving away from cars,” he said. “But surely it is us — the automakers — who have abandoned our passion for cars.”

That is bold of him to say. Of all the executives put in the spotlight, Akio has done the best in handling his company's situation.

[ECHOKnight2000]

Originally Posted by silver04rollas

Could this makr the return of the "performance oriented" Toyota company from the 1980s and 1990s when Toyota had 5 - 6 full-fledged sports cars?

Really? Toyota had that many full fledge sports cars??

[the_professional]

We did have a lot, maybe he's including those abroad?

-Toyota Supra
-Toyota Celica
-Toyota MR2

some like myself, consider the older corollas pretty sporty in their own right. hell, there was an AWD Camry 2 decades ago.

[got-rice]

Originally Posted by the_professional

We did have a lot, maybe he's including those abroad?

-Toyota Supra
-Toyota Celica
-Toyota MR2

some like myself, consider the older corollas pretty sporty in their own right. hell, there was an AWD Camry 2 decades ago.

Sadly, these models were discontinued because of poor sales. If Toyota still made these Corollas, I don't think the Corolla would be as boring as it is. I wish the US got the AE101 Trueno/Levins like Japan did. During this time, the Civic was taking prominence as the premier compact on the North American market.