Um no. What I'm saying is that Watanabe correctly identified the essential problem as a -once in one hundred year- market shift. In this case, it has to do with the shift from a petroleum based energy/vehicle paradigm to something else (which actually hasn't fully shaken out yet). Secondarily, although Detroit's business model tanked before Toyota or Honda showed problems, all durable goods producers are going to have a bad year as consumption of ALL durable goods is hit by the recession. So the global slowdown and profitability hit you see Honda or Toyota taking can't really be attributed to their product design. I actually made no comment on the relative quality of Detroit vs. Tokyo designed products in this thread. Making that argument probably would be best done by simply looking at market share. But that is a different subject entirely.

Last I heard, Mexico wasn't a state or territory.

@thrid001: closest thing to an american car i ever bought was a mazda.

That said, my Toyota is made right here in America while most Chevy's are made in Canada. so which one is more American?

@mac-phisto: Let me be clear. I GET that obtaining operations financing has contributed to some of GM's problems, but that seems to be ignoring their poor performance before the credit crunch and their issues if they got loaned all the money they wanted. Their problems have been going on for a few years (i.e. pre-credit crunch).

a lot of people just don't understand the concept of commercial paper - what are you gonna do?

@Eyebrows McGee: Which has a moderating effect on their economics, when they lose, they don't lose that much. When they're profitable, it's still really good, but not as profitable as they COULD have been. IMO- a better operating model.

@Jim Topoleski: Completely disagree. American quality is not up to the same standards as Japanese. They cost more to maintain, have generally lower MPG for similar cars, parts are more expensive, etc. American car companies relied on two things- a core that would always buy American, no matter how crappy their cars are, and SUV's. They pissed off the American car buyers by making crappy, boring, cars. So, then they put most of their eggs in the SUV/Truck basket. Problem is, you put enough SUV's/Trucks on the road, consumption goes up and gas prices rise. Soon, you can't afford to drive your SUV anymore.

[yaleglobal.yale.edu]

I can not disagree more. American cars just can not compete on pretty much any level. They have higher cost of ownership, higher operating costs, have less style, and well are less American than "American" cars. Trucks are about the only thing American car companies can produce and be competitive in, but they are starting to fall behind there too.

That is not why they are failing though. It is why foreign car companies are generally fairing better. They are failing because people are in general buying less, including and especially cars. Bailing the big 3 out at best allows them to survive until America's gluttonous consuming returns, or more likely until they fail out right.

This is like when the earnings reports come out and because the companies MADE MONEY, but they didn't make ENOUGH MONEY, the dow plummets.

Pointless. Totally pointless.

No, no... :-)

Vacuums create a low pressure zone causing the air at normal pressure to blow into the vacuum.

A hand dryer creates a high pressure zone causing the surrounding air at normal pressure to suck that high pressure zone back to normal pressure.

Common mistake, sir.

"The Japanese company employment system factors two "bonuses" per year into employee salaries (one in summer, one in winter). Usually, the "bonuses" are 1-3 months salary. My guess is that they're going to shaft the grunts on their bonuses and things like unplugging the dryers is their way of demonstrating how bad things are so people are less disgruntled at not getting their usual "bonus". These bonuses aren't really bonuses though. They are salary that is essentially withheld and rationed by the company, so it's a pay cut in reality."

Yea, I work for a Japanese car part manufacturer in the US and this is how we are structured. The "bonuses" they give out aren't really bonuses in the sense as most ones are. My salary as an engineer is thousands less than the standard for average engineers but they try to make up for it with these so-called bonuses. They make up about 1 months salary for me and this year they have already cut my December bonus in half. It was like they took a week's pay from me but I still had to come to work for that week.

Overall we're taking all sorts of cost-saving measures including stuff like trying to get rid of most of our paper towel dispensers and replacing them with air dryers. So far we have saved over $7,000,000 by cutting things and changing the way we run.

People didn't stop buying cars because they aren't "green" enough, it's that they either do not have or are not willing to risk having to commit to a $500+/mo expenditure and keeping their perfectly functional 3+ year car a little longer than they used to.

The American economy went on a pretty much everything bubble. Home price bubble, debt bubble, massive consumerism bubble, and they are all popping at the same time. Due to outsourcing and global supply chains, this suddenly hits everything.

This "green" push is just making it worse - after all, what good is a car that gets 2x the milage of your current car for 2x the price of your current car, when you can't even afford to replace your current car anyway?

All automakers would be better off setting fixed prices that are reasonable and make them a decent (not excessive) profit on the vehicle, instead of playing the MSRP vs Invoice, Dealer Rebates, Red Tag events, etc. negotiating shell game...

The exchange rate can amplify the problem, but broadly, exporters like Japan and China will not make sales targets because of the decline in US consumer purchasing. Tomer Tishgarten makes a good point. The perception in the States is that this is a US issue that spread globally. The reality is that it always was a global issue, and there is no portion of the global economy which is 'immune' to the effects. Thus, recriminations and nationalistic fervor to find blame, mean little, and only worsen the problem.

Now Toyota is blaming the economy as well. The southern Republicans that were going to filibuster the auto bailout i bet will demand money for Toyota if they start closing plants.

Besides Japan is in a horrible recession too.

The hand dryer thing is probably tied to logic that it will reduce overtime. Think about it -- thousands of employees standing around the dryer for minutes unnecessarily.

ISnt alot of this at toyota due to the yens rising value against the dollar?

Toyota "suffered from plunging vehicle sales not only in North America but also in once-promising markets like India and China, which many had hoped would prove immune to the United States malaise."

Did someone think that we're not globalized any more?

Tomer

Toyota wouldn't resort to stupid PR tricks of making people think they are being "green," to lure customers. They are in business to make cars, not friends, and take more pride in being efficient.

Their manufacturing is so darn efficient that to cut costs they have to look at other things they do internally that can be done more efficiently. Cutting down the electric bill is a good place to start.

No its a profit. The company overall is making money. So at the end of the year it'll be bringing in money. half-a-billion at that.

Suck on it. Design something memorable and useful.

They should disconnect electric hand dryers everywhere! Those things suck!

Also, they have $47 billion in liquid assets and $31 billion in cold cash. They will NOT be needing a bailout anytime soon.

The Japanese company employment system factors two "bonuses" per year into employee salaries (one in summer, one in winter). Usually, the "bonuses" are 1-3 months salary. My guess is that they're going to shaft the grunts on their bonuses and things like unplugging the dryers is their way of demonstrating how bad things are so people are less disgruntled at not getting their usual "bonus". These bonuses aren't really bonuses though. They are salary that is essentially withheld and rationed by the company, so it's a pay cut in reality.

The fact that companies in Japan are crying about the economic conditions, but still going out for year-end parties where everyone eats their fill and gets liquored up on their company's dime is a good indication of the sincerity behind these sorts of actions. They'd save a lot more if they cut out "bonenkai" and "shinenkai" parties, but I'd wager they won't do that.

I realize that about half of Americans believe that Toyota can do no wrong and Detroit can do no right. Of course a significant fraction of Americans also believe that Neil Armstrong didn't land on the moon.

Of course, there are a lot of if's up there, and at the end of the day, most companies would probably be better off sticking with the electric hand dryers since that's a lot of steps in the product's lifespan to keep track of. The Dyson Airblade is a great product, and it has a lot of competitors entering the market, so I think there will be no contest between hand drier and towels.

But in the situation happening right now they are using their previous years profits to keep things going because the banks are refusing in general to give out operating loans (despite getting billions in loans themselves TO give out the very loans they are withholding). Now in any other year all they would do is cut into their profits for this year, perhaps even recording a loss but ultimately still be in ok shape as they will still pay back the loans in the end once all was set and done sales wise. But because they have to cut into so much of their bank to keep going right now thanks to the banks they are going to end up out of money before the sales they need to to pay back the coffers will come through, especially with the economic downturn which makes selling a lot tougher.

Ultimately the reason the big three are failing is not all the hogwash about bad cars, or MPG, or legacy costs that where being phased out as it was. Some of that may be contributing factors, thought more of it is perception than anything else since American quality and efficiency has been equal or better than the Japanese for a couple years now with Ford and GM, even WITH all the SUVs we have. But the truth is its ultimately because banks are refusing to use the money they where given to make loans to in fact make loans. Instead they are buying up other banks and expanding their business footprints.

Hint: Ask me what I think of the Volt.

Sad to see Toyota following these trends.

Automatic hand dryers suck anyway.

coolaid drinker!@Mr4Runner:

Quick question... what profits? If "profit" is less than "money needed to run the damn company", isn't that... loss, not profit?

@oneswellfoop: thats what the back of your pants and shirt are for!

Ugly Ugly UGLY.

While GM is putting out nice looking crossover models, the Japanese are putting out American aping large SUVs now.

Good thing they're making cars and not burritos.

The asian automakers dont have to worry about this as they receive subsidies from their own government as well as have a much different business design than western businesses with a central bank loaning and financing many business arms.

Honda and Toyota wont get into their position because their government would never let them get into it, unlike the US which uses rhetoric and politics to screw employees and turn citizens against them for good measure while they hide the truth behind their lying.

or, i dunno, choosing to make more gas guzzlers like the ones already sitting on lots and delay making the hybrids that have a waiting list?

so we're bailing them out next because of the jobs they create in the south? :P

same logic different area.