Radio Australia Today Editorial

Toyota. When it loses, it really loses.

23 December 2008

Did you see the news today about Toyota having its first-ever loss?

And what a loss. Two and a half billion US dollars.

For a company that has never posted a loss before, this is hard news. Toyota is a company has really been doing everything right. It’s been producing reliable, fuel efficient cars, including a hybrid. It has diversified its manufacturing, producing cars in the US, Australia, Thailand, China and just about everywhere else. (A smart move which insulates the company from any problems that might affect the Japanese economy).

Unfortunately, no matter what Toyota did, it could not make up for the problems in the world economy. First the price of fuel went up, which turned people off all cars, not just the gas guzzlers. Then the bad economic times hit, which stopped people from buying anything, including cars. The recession has brought down the price of oil to a third of its year-ago levels, but this is not enough to get people back into car yards.

In the US, General Motors and Chrysler are in trouble, bail-out or no bail-out. Ford, which received no part of the bail-out loans from George W, also faces lean times. You would think that Toyota is one of the few companies that would be immune to the ills of the world economy, but it is clearly not.

There’s the adage about what doesn’t destroy us makes us stronger. That’s fine, but in the process a lot of people, workers in Hiroshima and Lansing are going to find themselves without jobs by the end of the recession. They won’t be stronger. GM and Chrysler may have brought their woes upon themselves, but at least the Toyota story tells us that it isn’t always boss’ bad board decisions that cause the problems.

What we’ll know soon enough is who is going to make it out of this thing alive. Somehow I think Toyota will be one of them.

- Phil