The chairman of Toyota Motor Corporation is so concerned with the state of the American auto industry that he is recommending Japanese auto companies increase prices for their products:
Okuda told reporters Monday that Japan’s auto industry must consider a response, such as raising car prices in the United States and cooperating in technology.
“We need to give some time for American companies to take a breath,” Okuda was quoted as saying by the Nihon Keizai Shimbun, Japan’s biggest business daily.
It’s a sad day for American industry when its foreign competitors feel compelled to lend a helping hand.
I’m not criticizing the Japanese. They have done a bang up job taking the long range point of view. Their focus on developing reliable, affordable, fuel efficient vehicles has given them a competitive edge. The Toyota Motor Corp. chair is articulating this long range vision with his statements. He recognizes that Toyota, if it continues on the path it is currently following, could be blamed for the complete implosion of American car manufacturers. In reality, Toyota contributes to this implosion by offering superior products that the American car companies are too short sighted to develop. And I won’t deny that the business environment in Japan is different from that of the United States, which may result in other advantages to the Japanese automakers (although many Japanese cars sold in the US are manufactured in the US as well).
No, this is a pure criticism of American car companies and the federal government that sets the policy framework they operate in. The auto industries and their lobbyists have been playing head-in-the-sand, working their connections with federal representatives to defeat initiatives to increase gas mileage standards and lower emissions. Their efforts have been successful, but that success is tainted with the bitter taste of failure to compete. Emblematic of this industry/government failure is the juxtaposition of the end of a tax credit for purchasers of hybrid cars while at the same time purchasers of SUV’s over 6,000 pounds (like Hummers that only get 8 miles per gallon) can write off their purchases in entirety in one year.
Now, American car manufacturers are reaping the whirlwind, with sagging sales and extensions of mercy from their competitors. Bittersweet mercy it is too. If Japanese competitors were to actually raise their prices, they would probably continue to sell a similar number of cars and increase their profits, furthering their competitive edge with access to even greater resources for technological development.
While faring better than GM, Dearborn, Michigan-based Ford is also losing market share and says it could sink post a loss or break even before special charges in the second quarter.
Toyota, which reports earnings next month, has been consistently boosting global sales.
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Toyota, based in Toyota city in central Japan, has passed Ford to become the No. 2 automaker in global vehicle sales. Some analysts believe it’s just a matter of time before it catches up with GM, the world’s biggest automaker.
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On Monday, Nissan Motor Co. posted record profits for the fiscal year ended March 31 with U.S. vehicle sales surging 18 percent from a year ago. Honda Motor Co. reported a 5 percent increase in fiscal year profit Tuesday as sales climbed to a record for the fourth straight year.
Business can be like an evolutionary laboratory. Those species that fail to adapt, disappear. We need visionary leadership in our remaining American industries and government to take on the challenges that face us. We don’t need those only interested in turning back the clock 200 years.
Respectfully crossposted at Daily Kos.
I hope Ford and GM take the hint and start to design and manufacture automobiles that are eco-friendly, well-made, provide truthful and comprehensive service warantees and work with the unions. These companies should also buy into alternative energy research: lobby Congress, provide R&D etc. (My first post).
Welcome and congrats on your first post.
I agree, I hope Ford and GM do take the hint. But our government needs to take the hint too and create policy that encourages innovation. Bush’s recently voice proposal to build more oil refineries indicates old school thinking and cronyism. American automakers need to use their lobbying power to compell legislators to create such policy.
…Japanese skill at making well-designed, well-engineered, long-lasting and, now, environmentally superior cars all the while “Detroit” was telling us it couldn’t be done. Even Bob Lutz, the GM veep who in 2004 said hybrids make no business sense has subsequently admitted that Toyota’s hybrids have been a marketing coup.
But those Japanese carmakers have a long way to go in other arenas. The Toyotas and Hondas (none of them hybrids) made in the U.S. are put together in non-union shops.
if Japanese automakers provided American workers in non union plants the same benefits that union workers received? I almost feel foolish writing this, but if there was no need for a union, who would benefits from its existence? Many union gains have been made in response to conditions imposed on their membership. If the workers were well treated, the greatest purpose of the union would be to act as a contingency in the event that management changed its position and started treating workers badly.
And you believe the corporations treat workers adequately because they’re so goodhearted? Companies match union benefits as a way to keep the unions out. Once the GOP has managed to destroy unions entirely, there will be no more reason for employers to provide a penny more than one lone worker can negotiate. Workers who refuse to vote unions into their shops are simply parasitizing the ones who pay their dues.
Very naive comment.
…pay at non-union U.S. plants run by Nissan, Honda and Toyota is similar to unionized pay. But on health benefits and pensions, the Japanese-owned plants are way behind. The fact that they have built their plants in “right-to-work” states speaks volumes about their intent in this regard.
In Japan, a larger percentage of workers are unionized than in the States, but many of these amount to company unions – a result of the Nissan strike of 1953. But if the Japanese owners would help push for a national health care plan in the U.S., I would be more than willing to ease up on my rant about their anti-union practices.
If the businesses would start thinking past the next quarterly earnings statement they might get a clue.
Nah – not gonna happen until a few of the big companies implode – GM, United Airlines, just pick on of the NYSE pages.
Maybe embarassment will get them to think but I’m not holding my breath. I’ve worked for a few of these CEO’s. Everyone of the CEO’s with short sightedness is currently sharing Captain duties on the Bismarck.
Running around in circles until it sinks….
the price of Japanese small cars went up, b/c there was such a high demand for them. Detroit countered by raising the prices on their (totally crappy – think Vega) small cars. Then proceeded to bash the Japanese for their woes.
The Japanese bashing was so ugly that my half-Thai nieces (Vietnam vet brother) were verbally assaulted in a McDonald’s – “who let them gooks in?” They were children!!!!
I just hope we’re not headed back down that road.
Those Vega’s were a joke although a rather dangerous joke at times. I remember that foreign car/Japanese bashing. Your right it was pretty ugly and stupid at the time and that you were somehow unamerican for buying a Toyota.
I have driven Japanese automobiles exclusively since “82 and personally will not consider owning an American, read big three, vehicle. I am currently in the process of acquiring a new Accord Hybrid at, what I might add, a premium cost because of their short supply. Quite simply, the American auto industry is living in the past, not unlike a large portion of the population. Hence the resurrection of the retro design, if we could only bring back the glory days of the 50’s, crap on the streets. Creativity and imagination in this industry have been taken over by the europeans and the japanese industries.
I would not be surprised if this is merely posturing on Toyotas part to present a sympathetic face on their success before Detroit starts pushing for tariffs and other governmental intervention, including a potential bankruptcy handout- ala Chrylser for those of you who’ve forgotten, against the “unfair” competition from abroad.
Detroit has used their substantial lobbying influence to curtail any improvement to the CAFE stds and pushed strongly for the tax credits for the massive suv’s precisely because it enabled them to amass huge profits. Once again greed and arrogance going hand in hand.
is probably just afraid some psycho in the White House will start obsessing about Japan’s WMDs.
I don’t think big auto can be embarrassed. Innovative and visionary has become an oxymoron for the auto industry. They continue to fight tooth/nail(what kind of weird expression is this by the way)against higher fuel milage standards, they fought mightily against airbag safety, their insistence on big ass SUV’s and so on.
Going from a world leader, to being feared to now having some countries sorry for us would seem to complete our downfall on the world stage.
What they say:
What they mean:
We raise prices because we can – we’re a business first and foremost.
If it’s true that they pay comparable wages, but without benefits, then they don’t pay comparable wages.
Look for this happening in other international industries as well, not just in major manufacturing.
It’s Education AND the Economy, Stupid. (not you, Lapin)