Toyota Faces Big Risks In Becoming the World's Number 1

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  1. TriShield

    TriShield Super Moderator® Super Moderator

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    Toyota fears U.S. backlash over gains

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    February 13, 2007
    BY JOE GUY COLLIER and JUSTIN HYDE

    Toyota Motor Corp. is bracing for possible political and consumer backlash caused by its rapid U.S. growth, according to an internal report obtained by the Free Press.

    Toyota executives have publicly downplayed the importance of predictions that the Japanese company will pass General Motors Corp. this year as the world's largest automaker. But the Toyota report says the company could face criticism because its U.S. sales are increasing while U.S. automakers are losing sales and shuttering plants.

    "With recent market-share gains and sales continuing to increase, we are becoming the de facto leader of the industry -- that brings risks and responsibilities," according to a presentation by Seiichi (Sean) Sudo, president of Toyota Engineering & Manufacturing in North America.
    "Our competitors are jealous of our success."

    Detroit's congressional allies of GM, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group say it's not jealousy. They say Japanese automakers are exploiting an artificially weak yen to make their products more affordable.

    U.S. Rep. Sander Levin, D-Royal Oak, said he is considering legislation aimed at pressuring Japan and other countries to stop manipulating their currencies to boost exports.

    Japanese automakers "are importing the more expensive cars to the U.S., and getting the benefit of the yen imbalance," Levin said. Japan has "a clear-cut set of policies, and we don't have any."

    In the briefing to other Toyota managers, Sudo cited political and social risks. The report, left unsecured on computers at the company's Georgetown, Ky., complex, said Toyota could come under fire for:

    • Selling vehicles to U.S. customers with high proportions of foreign-made parts. Less than half of all content of Toyota vehicles sold in the United States is made in the United States or Canada.

    • Not including enough minority-owned businesses in its supplier base. The Rev. Jesse Jackson, leader of the Rainbow PUSH activist group, has asked Toyota to improve diversity efforts.

    Leaving a vacuum in U.S. communities as GM, Ford, Chrysler and their suppliers shed plants and workers.

    "A Democratic Congress, particularly those members with districts hit by Big 3 and supplier plant closings, may call for further oversight of the industry and Japanese companies in particular," the presentation said.

    Toyota's concerns are not far off the mark. With a new Democratic majority in Congress, Michigan's Democratic lawmakers have pledged to press harder on trade and other issues where Detroit automakers say Japanese companies have an unfair advantage.

    Last week, two Democratic House members from Michigan -- Levin and Rep. John Dingell of Dearborn -- sent a letter to Treasury Secretary Henry Paulson, urging him to press Japan over the value of the yen during a meeting of world economic powers.

    Dingell, Levin and two other congressmen said that a weak yen had helped Japanese automakers increase their exports to the United States by more than 30% in 2006. Detroit automakers and their congressional allies say the yen bestows up to a $4,000-per-vehicle benefit for Japanese automakers.

    The Harbour-Felax Group, a Royal Oak automotive consulting firm, estimated the yen benefit at $1,054 per vehicle in a study it released last fall.

    "It is a little-understood fact that Toyota's exports to the United States are almost as great as the number of vehicles produced in the United States by Toyota," the lawmakers wrote. "We are certain that the weak yen is also boosting Japanese exports in other economic sectors and is having a significant impact on many U.S. producers."

    Toyota's public image and ability to operate with few barriers in the United States are significant because this is the world's biggest market and a source of huge and profitable growth for Toyota. Its U.S. sales rose 12.5% last year, and it is expected to have $13 billion in profit this fiscal year.

    Toyota passed Ford and the Chrysler Group in global vehicle sales and could pass GM thanks, in large part, to its ability to beat Detroit on its home turf. The Camry has been the best-selling car in the United States in nine of the past 10 years. Toyota's U.S. market share has doubled since 1996.

    Toyota would not comment about Sudo's presentation except to say it was a 5-year planning document that looks at challenges the company faces. The Free Press reported last week the report also contained information about Toyota's plans to hold down increases in U.S. labor costs and its worries about maintaining quality.

    "Toyota will continue to focus on further enhancing productivity, quality and safety, and this was the essence of the planning document," spokesman Daniel Sieger said.

    Toyota officials have said the possibility that their company would pass GM as the world's largest automaker is irrelevant to them and to consumers. Sudo's presentation, though, shows that Toyota sees a possible downside, especially in light of U.S. automakers' financial difficulties.

    "Toyota will be a 'scapegoat,' " one slide says.

    "Society expects that we will make the same economic and social contribution as the companies we replace," the accompanying text says. "And we need to position ourselves to respond to corporate image attacks."

    Toyota has been putting millions of dollars into efforts aimed at promoting its benefits to American society. In Washington, subway stops frequented by policy makers are plastered with ads extolling Toyota's U.S. employment figures.

    Next weekend, Toyota will hit the track in Daytona Beach, Fla., for the start of the NASCAR Nextel Cup season, the first entry by a Japanese automaker in the nation's most popular racing series. In the past year, Toyota also has run TV ads and put up billboards touting its economic impact on the United States.

    Toyota executives are acutely aware of their position in the United States, said Matthew May, author of "The Elegant Solution: Toyota's Formula for Mastering Innovation."

    Toyota has a culture that stresses both competition and humility, said May, who spent eight years as a senior adviser and instructor for the University of Toyota, the company's Torrance, Calif.-based corporate college developed to teach the Toyota Way principles.

    Toyota has ambitious goals, he said.

    "At the same time, you have to balance that with the mother ship who is saying, 'Beat them but don't drub them,' " May said. " 'You don't need to spike the ball in the end zone' is really the message."

    Toyota has one major factor in its favor as it tries to prevent backlash. The U.S. sales growth also has fueled a rapidly growing manufacturing base that hits more states and congressional districts each year.

    Toyota has 13 U.S. plants, from West Virginia to California. Its first was a joint venture with GM in 1984 in California. Now states are lining up for what is expected to be several more in the next 10 years.

    Last month at the auto show in Detroit, Bob Lutz, GM's head of global product development, said: "It is my considered opinion that Toyota has more clout in Washington than GM."

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  2. o.negative

    o.negative OT Supporter

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    their taking our jerbs
     
  3. Light Speed

    Light Speed Guest

    ambiguous and biased, noones (or not all the american companies) is/are "shutting down plants"
     
  4. OneTwo

    OneTwo me>you OT Supporter

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    toyota > the world

    all they need is a sports car
     
  5. chamackO

    chamackO New Member

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    BUT WAIT! I thought Americans were in favor of free-trade? About time some Americans experience what the Mexicans had to go through post-NAFTA :hsugh:
     
  6. jimmybuffett

    jimmybuffett New Member

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    maybe if domestic vehicles didnt suck so much shit, we wouldnt have this issue

    toyota is on top for a reason people
     
  7. disc108

    disc108 New Member

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    pretty good foresight and they're being honest with themselves. good stuff
     
  8. TriShield

    TriShield Super Moderator® Super Moderator

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    They are snuffing out local automakers wherever they set up shop. Not just here.

    Also, many of their competitors arguably build better cars. Even U.S. automakers.
     
  9. GBlansten

    GBlansten OT's Bean Doc OT Supporter

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    I just read that on the original site. Toyota will wind up number one because consumers love their cars. People vote with their wallets.
     
  10. H Dog 14

    H Dog 14 New Member

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    :wavey: Toyota owner.
     
  11. GBlansten

    GBlansten OT's Bean Doc OT Supporter

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    Lexus:wavey:
     
  12. jimmybuffett

    jimmybuffett New Member

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    im sorry i cant think of one automaker that comes close to building same quality vehicles with a similar price tag
     
  13. H Dog 14

    H Dog 14 New Member

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    actually, it's a scion.. but :wavey: still applies.
     
  14. emericanchaos

    emericanchaos Beer Crew #001

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    they're smart for recognizing this.

    kinda sad that they even designed the cavalier for GM and GM still can't get their heads out of their ass.
     
  15. GBlansten

    GBlansten OT's Bean Doc OT Supporter

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    I agree and it is hard to feel sorry for GM and Ford since they have had a few DECADES now to turn their shit around. They have an extensive dealer network with broad market access and the products have continued to fail in the marketplace.
     
  16. TriShield

    TriShield Super Moderator® Super Moderator

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    Even zeh Germans are scared. :noes:

    I would be too if people flocked to their horrible, plastic FWD cars over my teutonic products. :rofl:
     
  17. tbizzle

    tbizzle you smoke that shit?

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    oh snap...no you di'int
     
  18. TriShield

    TriShield Super Moderator® Super Moderator

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    :rofl: :ugh:
     
  19. jimmybuffett

    jimmybuffett New Member

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    you're right




    and i am not Trishield
     
  20. GBlansten

    GBlansten OT's Bean Doc OT Supporter

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    Scion is yet another smart marketing decision by Toyota. GM is closing up shop in Saturn's original site in Tennessee.
     
  21. emericanchaos

    emericanchaos Beer Crew #001

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    :noes::wiggle:
     
  22. TriShield

    TriShield Super Moderator® Super Moderator

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    Toyota had nothing to do with the Cavalier. That at least should be obvious.
     
  23. dibalicious

    dibalicious sexy crew

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    lol @ jesse jackson wanting more 'diversity' in their workforce. if you can do the job, you'll get hired.
     
  24. TriShield

    TriShield Super Moderator® Super Moderator

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    We are also the only country in the world outside of Canada and Japan that give Toyota products glowing reviews.
     
  25. TriShield

    TriShield Super Moderator® Super Moderator

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