Toyota Suspending Production For 11 Days In Japan

TOKYO — Toyota is suspending production at all 12 of its Japan plants for 11 days over February and March, a stoppage of unprecedented scale for the nation's top automaker as it grapples with shrinking global demand.

The last time Toyota Motor Corp. halted production at all its Japan plants was in August 1993, when demand plunged because of a rising yen, and that was for only one day, according to the company.

A global economic downturn has hammered the auto industry in Japan and elsewhere, forcing carmakers to cut staff, lower production and delay new models. Major automakers in the U.S. had teetered on the brink of collapse until securing a multibillion dollar government lifeline.

"We are coping with a slump in global sales," Toyota spokesman Hideaki Homma said Tuesday. "Demand in the world auto market is so depressed that every model is falling sharply in sales."

Toyota said last year that it was stopping production at its 12 domestic plants for three days in January. But it decided on additional closures because of the global downturn. Toyota will stop output for six days in February and five days in March, it said.

Of Toyota's domestic factories, four produce vehicles while the rest make engines and auto parts.

Overnight, Toyota reported that its U.S. sales in December were down 37 percent on year, a worse drop than Ford Motor Co.'s 32 percent drop and General Motor's 31 percent slide.

Toyota last year suspended production at its auto plants in Alabama, Indiana and Texas for three months, and shut down output for two days in December at all its North American vehicle factories including five in the United States, one in Canada and another in Mexico.

Chrysler LLC also shut down its plants for a month in December, longer than the usual two-week break, while GM has said it would shut down a plant in Thailand for up to two months.

Toyota is also struggling in its home market, which has been stagnant for years. The sales drop has worsened amid a global recession.

Sales of new vehicles in Japan fell to 3.2 million vehicles last year, the lowest in 34 years, the Japan Automobile Dealers Association said Monday.

Last month, Toyota said it was slipping into its first operating loss in 70 years, expecting 150 billion yen ($1.66 billion ) of operating losses for the fiscal year ending March 2009.

Toyota, which makes the Prius gas-electric hybrid and Camry sedan, expects 50 billion yen ($555 million) in net profit, down from 1.7 trillion yen earned the previous year.

Comments

[William1950]

doors and windows - for houses - are not selling as much. televisions are not selling as much. art is not selling as much. nothing is selling as much.... these discussions about cars miss the point entirely... you are all thinking that cars are separate from what is going on in the country - they are simply another symptom of a much larger problem. The middle class in this country is hurting... sure there are pockets around that are doing okay.. but as a whole the middle class is hurting. The middle class is what kept the automobile industry going... Incomes are down when indexed to the economy... the income gap between the rich and the not is the greatest since the depression.... Until we know what the issue is we cannot get it fixed... our incomes are slowly being dropped to match the rest of the world where our jobs have gone... how many new cars sell in china? bangladesh? the fillapines? the median income is dropping... even without the "crisis" of today. I blame free trade.

[KillTheMessenger]

You made perfect sense until you said "I blame free trade.". Indeed, without free trade there wouldn't be anything to buy in our malls. It was the rapidly dropping prices of Chinese goods that have offset the shrinking incomes of US workers (who is regularly mistaken for being middle class). Without them many more people would be below the poverty line today.

[William1950]

yes, there wouldn't be anything to buy in our malls ... because the stuff is not munufactured here any longer... because free trade allowed manufacturing to go offshore to low income workers... and low or non existant regulations, such as osha and environmental regulations... it's why we are being poisoned by chineese toys and dogfood... free trade is fine in therory, but we don't all play by the same rule set... when stuff was made here, we had workers that earned wages that enabled them in turn to purchase products that employed other americans ... that is not true now. free trade also allowed the export of debt that is causing havoc everywhere.

[KillTheMessenger]

OK, GM and Chrysler apologists. Let me make this absolutely clear for you. In business you either can or you can't. If you can't and you ask your government to bail you out, again and again, you are nothing but a leech.

[EinChicago]

Okay Toyota paid schills, let me make this absolutely clear. You either can or you can't and when you ask the Japanese government to illegally subsidize your R&D and southern states to bailout your US production again and again and again you are nothing but a leech.

[KillTheMessenger]

Since you start with a falsehood (that I am being paid by Toyota), how can I take the rest of your post seriously? How can anyone?

:-)

[pharm]

In other words, anybody that asks for a loan is a leech? The Prius failed to sell in Japan, and was sent here as an afterthought. The Japanese government SUBSIDIZED all the research and development costs, and now they try and deny it. An American who worked there at the time inadvertantly spilled the beans about it, after he lied to congress. Business Week Magazine Article

[KillTheMessenger]

A bailout is not a loan. A bailout is a payment buy your government after absolutely nobody is willing to give you a loan any longer.

"The Prius failed to sell in Japan, and was sent here as an afterthought."

Hardly. The Prius was Toyota's response to the Clinton Administration's "The Next Generation Vehicle" initiative which gave a billion dollars to the US car makers to build a high efficiency vehicle. Our guys took the money and ran. Toyota and Honda felt pressured to respond with designs of their own. The rest is history. The first Prius sold in the US was a second generation car with a much larger engine tuned to the US market. That's hardly an afterthought but shows continuous engineering work on the brand.

"The Japanese government SUBSIDIZED all the research and development costs, and now they try and deny it."

Proof please. I am getting tired of accusations without proof.

"An American who worked there at the time inadvertantly spilled the beans about it, after he lied to congress."

Who was that American? Jim Press? So he lied to Congress. Hmmm. Then he back-paddled like there was no tomorrow when Toyota said that he was lying. Got any better witnesses than that? I mean... somebody who does not have a habit of lying and contradicting himself? Maybe somebody who has some official documents to prove the story?

[DFL]

I refuse to buy any car where the profits go overseas, as with the picture above if i wanted a luxury car it would be Cadillac or Lincoln, sports car: corvette, small car: aveo or focus.

[KillTheMessenger]

Go for it. But don't ask the taxpayer to bail out the manufacturer of your pseudo-patriotic fetish mobile.

[porcolino]

to those blaming the dismal sales of US cars in Japan on unfair trade barriers, a question: why do German cars sell relatively well over there?

to find the answer, a bit of homework: please find out which US makers' cars are available with right-hand steering.

[Realization]

"Relatively" is operative. Last time I looked import market share was about 3%, including keijidosha" (light autos). Foreign cars have no widespread dealer networks. Knew a guy who ran Japan operation for a German auto firm. He was happy to get good press for strategy/sales but privately incensed at multiple barriers - intentional and informal.

Right-hand steering is an old canard. Any executive that put big money into building a car for a market he knew it was unlikely to penetrate was/is an idiot. (Maybe U.S. firms should have done it to push the market access issue but they didn't really have strong USG support.) Look at distribution. Japanese could get the best American dealers. The biggest and best located Japanese dealers were owned or controlled by makers. In the same situation, Japanese car sales in the U.S. would be limited. Dealers deserve more credit for Japanese success. Look up other problems with distribution in Japan. It's a key issue.

A question. Why are there few Korean cars in Japan or Japanese cars (with that wonderful management) in Korea? Let me know when you figure it out.

To understand the Japan story you need perspective. The problem has to be looked at strategically over time. We should have dealt with it effectively years ago but didn't. National failure based on arrogance and poor thinking. I admire the Japanese. We have much to learn.

Look at Korea. Protection is more blatant and easier to understand.

[NoPCZone]

When gas got really expensive last year, Toyota dealers were jacking Prius models- new and used- to over $30,000. This for a car that carried a list price in the low 20's. Toyota did nothing- not even the bully pulpit. Scion, the supposedly more affordable line from Toyota, has outrageously priced it's cars a well. They have abandoned the affordable car market even as they studiously avoid union in America and use slave labor in Burma to produce car parts.
You would think an Asian company would understand karma...

[Ridgemore]

Now that the US auto manufacturers are getting tax payers bailout money it would be dumb not to buy cars from the US companies. They fail and your money is down the tube.
http://www.thebigmoney.com/articles/bail-me-out/2009/01/06/bail-yourself-out

[Chicago48]

I've driven Toyota products and they're worth the price. Smooth engineering, smooth steering, and they last long. If you have to pay a few bucks more, you get what you pay for -- quality. Not saying that Amer cars aren't quality, but Toyota is a the top of my list should I buy a car.

[lylo]

Not my experience with Toyotas.
Very hard to fix.
Get an old Ford.

[KillTheMessenger]

That was, indeed, a serious mistake and it has tainted the Prius brand. In hindsight Toyota probably wishes to have done something about it.

[whatt]

BLAME THOSE NASTY UNIONS, OH WAIT TOYOTA IS NON UNION, HUM, OH WELL BLAME THE UNIONS ANYWAY, THE STUPID PEOPLE JUST EAT THAT STUFF UP.

[econ1]

How many people actually need a new car right now? If they stopped building new cars for a year and American's kept their current car for an extra year would it matter? This is going to make keeping all of the Big 3 in business a lot more expensive for the rest of the country. Already GMAC is promoting lower interest and lowering lending standards (which worked really well in the housing business). Wait till people decide their new car isn't worth the amount of the loan balance....the government will be taking over the used car business.

[Chicago48]

The car companies need to stop intro'ing new cars every year. You're right. Used to be peeps would trade in a car every year/every 2 years, but they don't do that anymore. The car comp's have to adjust. Stop intro'ing new models every year.

[KillTheMessenger]

You got a point. Cuba is a pretty good example of how long the service life of a vehicle can be extended with careful care... and it does not look good for car manufacturers.

[William1950]

all the arguments below have nothing to do with the root cause of diminishing funds... when the public.. buyers... have no funds, then they do not buy... I would love to have a new chevy in the garage.. but since I have no funds I keep my 89 firebird that is pushing 210000 miles.. but it still runs.
Free Trade is what killed the car market... Free Trade is what killed the job market ... Free Trade is what caused the housing crash ... Free Trade made greed easier by allowing the sales overseas of debt... Free Trade allowed our jobs to be outsourced with no penalties, Free Trade killed our economy...

[TrooAmerican]

["Overnight, Toyota reported that its U.S. sales in December were down 37 percent on year, a worse drop than Ford Motor Co.'s 32 percent drop and General Motor's 31 percent slide.

Toyota last year suspended production at its auto plants in Alabama, Indiana and Texas for three months, and shut down output for two days in December at all its North American vehicle factories including five in the United States, one in Canada and another in Mexico."]
---------------------
Same thing i have been telling people for months now.

The facts have basis, and the anti Union, Anti Domestic companies are A-holes with no personal accountability considering they continue to Push false, harmful agendas based on political desires.

Lets go over to the GOP offices of those southern senators and ask them how those incredible $73/ hour jobs at the domestic unions have been just Killin their foreign auto company allies sales... ya know... uncompetitive of course.

[Cinderpath]

Well this can't be right, from reading all of the comments from other viewers here, we would be lead to believe that GM, and Ford, and the evil unions were producing junk cars nobody wanted, and they should do everything the way Toyota does it, and they represent all that is good and pure about manufacturing.

Now you burst our bubble with the reality that nobody's car sales are good, and even mighty Toyota is having problems too?

The next thing you'll tell me is that Toyota produces vehicles like the Land Cruiser that are gas guzzlers and get the same mileage as Hummers. Oh wait, they already do that don't they.

[KillTheMessenger]

You got a point but the truth is that GM and Chrysler were staring bankruptcy in the face for the better part of a decade. This is not a temporary problem but a systemic one and the current downturn does nothing to the baseline of these companies which was already very, very low.

The difference between Toyota and GM is profitability in good times. One company is and the other simply isn't. And why the tax payer should bail out constant failure is beyond me.

[GReece]

As you often say, please support your statements with facts.

[MadamRoma]

That is just not true, and you have no facts to prove otherwise.........

[DFL]

STOPPING PRODUCTION IN JAPAN? -I WONDER IF NEO CONS WILL TRY TO BLAME THIS NEWS ON THE UNIONS?

[GerryS]

no, they will blame it on the middle class not spending money------------

[AZ AF VET]

how could that be? they have already all but eliminated the middle class.

[Chavez08]

Thanks to Reagan, the Japanese autos are allowed to DUMP their cars on the U.S. with almost non-existent tariffs (though near 100% for U.S. cars going to Asia) Their labor costs are low, the govt. subsidizes health care and Soc. Sec. and they STILL CHARGE as much OR MORE as U.S. autos for mediocre cars.

On the face,- U.S. sales of Toyota, Nissan, Honda have got to generate better than 50% profit per vehicle. (more to pay Republican Senators with)

[KillTheMessenger]

If you can't win an argument with truth, you can always try to win it with lies, don't you?

:-)

[pharm]

The fact is they have been "dumping"(selling here for less money than in Japan) for over 40 years. Their labor costs in Japan are 50% lower than their plants here. They have national health care and a government pension, where are the lies?

[EinChicago]

As you are the expert on that topic, I think we shoul dall defer to your experience.

[pharm]

They have dumped(sold cars for less here than in Japan) for 40 years. Labor costs are about half what they are in the U.S. They have national health care and government pensions(social security), the tariffs are about 25%. Where are the lies?

[porcolino]

to pharm, some facts to set the record straight: Toyota workers in Japan are not covered by national health services, they are covered by Toyota's in-house health insurance program. Toyota workers are not part of the national pension program, they are covered by Toyota's in-house pension program. Feel free to contact the American Chamber of Commerce in Japan for verification.

[William1950]

so maybe people will listen to me when I say that quality issues, labor cost issues ... union issues... have nothing to do with the downturn in sales... Cars are not selling because most of us have no disposable incomes!... the gap between the low income group and the high income group in this country is the biggest since the ... what??? ... the depression!
Our incomes have been flatlined for the last eight years at least... THAT IS WHY CARS ARE NOT SELLING. All the politicians try to use this issue to advance whatever side they are on... the conservatives say it is because of unions and the south of the border illegals... democrats say it is because of reaganomics and de-regulation.... while they all are getting richer and the workers in this country are getting the shaft.

[Trogenhorse]

I have to agree. People either have no money or are holding on to it for fear of needing it in the near future. Unlike Mika Brazenski I don't think US cars are junk. I had an escort and drove it to ~175k miles. I got rid of it when the car could physically do no more. I never spent more than 1K in repairs in over the 11 years I owned the car. Now I have a toyota. It has ~177K and shows signs that I will need a new car. I have put about the same amount in repairs in it.
I buy what will last and is economical. I don't want to spend more money on a car and like most people, I am trying to keep this one running for as long as possible.

[lilpeg]

I have to agree. People are not buying cars b/c they don't have the money on hand to do it. Have we heard how the used car business is doing??? Most used cars are sold for cash in hand, no one will loan you the money if the car is older than 5 yrs. old. I'll be that is what people who need a "new" car these days are doing. If so, it is further proof that it is not the product that is the problem, it is the customer and her ability to buy.
AND, why shouldn't people be holding onto their money??? Isn't that the lesson of this economic nightmare, don't spend it if you don't have it, save for a rainey day, etc.??? Pay as you go, pay on time, have cash, not credit.

[therealredstateblues]

Exactly - the troubles with the auto makers are the symptoms of the larger economic problems not so much anything thae car makers did or didn't do

[Realization]

Japan's Ministry of Industry had a major support program for manufacturing, particularly the auto sector in the 90s when "hollowing out" was a threat. And Japan has really no foreign auto firms competing in its domestic market thanks to years of protection. It will certainly support the industry. The trick for the U.S. will be to seize this opportunity to wring imports out of the system. The trade deficit has to be eliminated with Japan, Korea, China, etc. We simply can't keep buying more than we sell. Actually, it could make business sense for Japanese makers to produce here and ship back to their distribution systems in Japan. Won't happen in any but a cosmetic sense. The Japanese have more considerations than just business. It's national power. (In the late 80s, Honda made a big deal out of producing an Accord, I believe, in Ohio for the Japanese market. Lots of PR. The thing had steering on the wrong side, something they accused foreign makers of doing wrong. I asked a couple Honda dealers about the vehicle. The dealers, as opposed to official company PR flacks, were unanimous in saying it wasn't designed to sell - wrong steering, wrong accessories, wrong price point, etc. They did say it attracted some interest they could point toward domestic Hondas.)

[KillTheMessenger]

Care to prove what you are saying? Or are you like Rush? Put it out there and see if the lies stick with those who want to believe them?

[Realization]

You want to start with the laws? Can you read Japanese? Don't much care for Rush myself. I do notice that your postings smack of propaganda. You happen to work for a Japanese firm or something related?

[MadamRoma]

What he is saying was and still is fact. IN tn the eighties the Japanese called their minivans trucks to avoids quotas, they were allowed to get away with it by our elected officials. They have been playing dirty games from the beginning and when they are cornered they lie like a pack of dogs.

[pokemon]

Just another sign that the world is heading for an economic downturn that even the feds are worried about. Its going to happen so lets all just pretend it is going to get worse before it does, that way we are mentally prepared instead of in shock.