There has been a lot of news about the domestic automakers burning through billions of dollars every month, but today Toyota is announcing that it lost money for the first time in 70 years. The $1.7 billion operating loss is significant, but it’s not close to the amount that GM, Chrysler and Ford have lost over the past few years.
What it does signify is that the global car market is in dire shape and even the strongest companies will be losing money. One analyst quoted by the New York Times says it is only a matter of time before all automakers see similar results. Toyota is predicting even bigger losses through summer 2009.
Supposedly, the company is taking extreme cost-cutting measures at its Japan headquarters like unplugging electric hand dryers in bathrooms.
More significant cuts will include the suspension of operations at new plants such as the Mississippi plant that was slated to build the new Prius. Instead these plants will wait for an economic rebound.
Many production lines will reduce shifts to keep capacity closer to demand, a move that domestic automakers have already made.
Toyota traditionally doesn’t offer major cash-back incentives, but we would expect to see more deals, especially in early 2009 on most of Toyota’s models.
Toyota Expects Its First Loss in 70 Years (The New York Times)