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Toyota President Acknowledges Defeat, Says Company "Grasping For Salvation"
In a rare example of corporate accountability and humility, the president of Toyota, arguably the best run auto company in the world, Akio Toyoda, had some very harsh words for not just his company's recent decline, which he characterized as "grasping for salvation", but for his own failure at prevent this collapse. One wonders when Mr. Toyoda's American counterparts, whose own failures are orders of magnitude worse, will do admit even a minor fraction of comparable culpability.
The world's largest car company was once targeting annual sales of 10 million vehicles but now expects sales of 7.3 million this year, down from 8.97 million in 2008, Toyoda said today at a news conference.
Citing the five stages of corporate decline outlined by Jim Collins, author of How the Mighty Fall, the Toyota chief warned that his company has slumped to stage four, which Collins calls “grasping for salvation.”
“We are grasping for salvation,” Toyoda said, adding that the company already has spiraled through the first three stages: (1) hubris born of success, (2) undisciplined pursuit of more and (3) denial of risk and peril. His self-admonitions echoed the apologies commonly made by Japanese executives who take responsibility for financial turmoil or corporate scandal.
“Toyota has become too big and distant from its customers,” the grandson of the automaker's founder said as he prepares for a second-straight year of substantial financial and unit-sale decreases.
What is shocking is the humility in Toyoda's confession: while Toyota is nowhere near Jim Collins' Fifth stage "Capitulation to irrelevant or death", this is precisely the circle of hell in which the Detroit 3 find themselves yet continue deluding themselves that they provide relevant, innovative products. Ironically, these same American companies never cared to admit as they were spiraling out of control through the first four stage either, and now it is far too late for redemption. And compliments of a subsidy-happy and union-friendly administration, US auto makers will continue their perpetual state of denial, long after Toyota has been reduced to a shadow of its former self, despite having an incomparably better business model.
And as to why not just subsidies, but a Bernanke-mandated policy of trade isolationism, simply for the sake of pumping up a Ponzi stock market, will be the ultimate reason for capitalism's downfall, as otherwise efficient companies are unable to compete in a world market supported by a flounder reserve currency, this is what the Toyota president had to say:
Toyoda called the current dollar-yen rate "very tough," saying the weak U.S. currency made it difficult to return to profit on an unconsolidated level.
If anyone thinks Toyota is alone in its plight of taking on the Fed's printing presses head on (even as Japan's finance minister inexplicably is for a strong Yen policy and thus suicidal to his country's trade balance), you are wrong. As America is a major net global importer (or has been until Bernanke decided to kill the dollar), all who wish to sell their wares to the US consumer are at a significant disadvantage as they have to cut prices, thus eating into profit margins and bottom line earnings.
Will things change? No. After all Obama needs to subsidize every single dead or dying industry in order to spend the billions of dollars that the Chairman has printed. Expect numerous such dislocations in all aspects of the US economy. Ironically, even Toyoda is against an ongoing tidal wave of endless government subsidies:
Toyoda said he would welcome an unlikely extension of Japan's cash-for-clunkers program beyond March, while adding it would not be prudent to keep depending on the government for help.
Unfortunately, at this point in the life cycle of American capitalism, "depending on the government for help" is the only thing the shattered business world of a formerly great country can rely on.
h/t Dvolatility
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Well, this is good medicine. The US has had to deal with the same aspect for years while the Yen declined vs the dollar (manufactured by Japanese intervention) so now let the Japanese company become more efficient or move production to............the next cheapest country.........or even the US if the $$ declines against most world currencies.
Some more good medicine would be for the US to impose a $3500 per vehicle emissions inspection fee, along with $800 per vehicle registration fee, along with $1000 per vehicle transport fees to and from the emissions inspection station, etc, etc, etc. Just like Japan does to every foreign vehicle imported into Japan.........There is a reason why very few foreign cars sell in Japan, it is just cleverly hidden in the high retail cost.
$8000 per vehicle inspection, registration, transport and insurance + taxes would go a long way to fixing Cali's budget problems....Japanese auto exports to the US in 2006 were $85 billion. Oh, it would also motivate them to actually produce all their cars in the US, not just half of them.
You are an idiot. Toyota has extremely diversified manufacturing operations throughout the world. It is great not because the yen was declining, but rather because it can produce a car at a third of the price of US companies.
One of the main reasons that Toyota made $14 billion in 2006 profit is because Japanese auto companies hired 40,000 Chinese and Brazilian workers and imported them to Japan to work in factories for $3.50 / hr. Those workers were laid off last year and this year. If an American company tried that in the US, the UAW would strike and the company would be dragged through the courts for violation of minimum wage laws. Japan has a similar minimum wage law to that of the US, yet various Toyota subsidiaries had no issue with paying below min. wage. Why not? Did the Japanese government turn a blind eye? Are your eyes equally blind?
If you love them so much why not offer them your services at $2.50 / hr?
BTW, Honda consolidated production of the Gold Wing motorcycles in Hamamoto, Japan last year and shut down production of that product in Marysville, OH. I guess diversification was not profitable for Honda, right??? Not for the great Toyota either, I see, since Nummi is disappearing this year too, now that Toyota can no longer drag on GM to fund the plant through their JV.
I see also that you did not even try to refute the allegation about non-tariff barriers. Why not?
Silly Japanese haven't yet learned to be accomplished liars like we Americans.
Never admit defeat. You are simply marshaling resources for the next assault.
It can also rally the troops
Work for a Japanese company here in the US..... They are all bitching. Sometimes it makes me feel good to know the pain is not ours alone!
Accountability and humility by a U.S. corporate exec? Surely you must be kidding?
japan's largest trading partner is China - that is where the growth is. Japan may be signaling that it intends to absorb some serious pain in hopes of finally breaking its addiction. use the stonger yen to horde in the material deficient country
Shout out to Ken Lewis.
Japanese have honor, accountability, and humility. Here's a slightly dated ~1 year old, but very timely example of a Japanese CEO:
http://www.glenntilton.com/newsarticles/2008/11/6/japan-airlines-ceo-slashes-his-pay-below-that-of-pilots-cnn.html
The Japanese have a culture that many see as a weakness. I disagree. Such humility displayed by Toyoda is a reach back to that culture. It preceeds introspection. The Japanese will pull together as a culture and survive. The US, declining without a strong culture to fall back on, will be like a sinking ship. And, as this administration and the Fed drill more holes in the bottom to let all the water out, the rats will start abandoning ship.
Oh, we do have a strong culture-- it's based on winning at all costs.
Unfortunately, it's been primarily fraud and deceit that has been making the ends meet over the last decade or so.
Well, exactly. Japan's biggest problem over the last two decades may be their desire to be more like the US. Perhaps this crisis will show them the errors of such envy.
Well.....our biggest problem right now is we are acting like them. QE first and rising taxes next.
Great.....does this mean 2 lost decades for us too?
It will most likely be worse for us, because of the country's massive economic imbalances.
It is likely that it will be worse for us, because of our massive economic imbalances.
Quite so. When the Japanese turned on their printing presses, the people saved money. On top of that, there was little consumer debt to begin with. We are in way over our heads for many reasons to hope that we fare as well in the foreseeable future as Japan has for the last two decades.
My dear departed Grandfather once said that America seems to move along quite nicely on a flatbed of larceny. He passed away in 1981 of real old age.
So I suspect the fraud and deceit might go back a bit further than the last decade or so.
Larceny is now computerized and doesn't move on a flatbed anymore.
Exactly, if you can't win honestly then cheat. It permeates our entire society from athletes that cheat to our exalted celebrity entertainers who cheat on their wives, cheat on their taxes etc. etc. etc.
Cant wait to hear Bob Piss-on-me Pisani make the case that the bulls came back to salvage another day.
The Japanese have an emotion that is completely alien to American business. It's called "shame."
+10
I especially love the new GM commericals with that old geezer chairman of theirs. What's his line? Oh yes, "car for car when compared to the competition, we win, simple as that." lol....
full commercial here
http://www.youtube.com/watch?v=m0te5pU_3qk
Government Motors
After we 'saved' GM, remember that commercial with the hottie pushing Buicks? I literally couldn't stop laughing. Do they know anything about marketing and demographics?
Those commercials are sad because they are so stupid.
He needs his mouth washed out with Absorbine Jr.
As long as General Motors is one of the two remaining manufacturers of actual cars vs glorified golfcarts and exotic showpieces.
I drive a car from one of GM's other abandoned brands and I'm not ashamed of driving it or owning it.
(1) hubris born of success, (2) undisciplined pursuit of more and (3) denial of risk and peril.
Hmmm... where have I seen these 3 before...
day-trading...it's for losers, ya know
With a puny 50 point drop in S&P, many bears are already sounding like the above.
Exactly the same as I thought but the kids will miss this I think.
And Ford CEO Alan Mulally is touting a V-shaped recovery (38% growth by 2011) in the U.S. car market. Enclosed is a link to our report on why his Thesis is WRONG. The U.S. car market is in a terrible funk from which it is not going to recover in a long time to come.
http://firecracker-report.blogspot.com/2009/09/why-ford-ceos-us-car-market-in-v-shaped.html
They should get used to it. The rest of the world has been manipulating their currencies for decades to gain a favorable trading position with the U.S. Now the U.S. consumer is tapped out. Time for us to save and export and for them to spend and IMPORT.
Man, if Toyota is in stage four, US auto companies are probably in stage 10.
TYLER and ZH Staff / As we approach another end of a long week, a short note to say "great work" (again), and "thank you" for bringing so many issues and topics to the attention of the marketplace. I think a lot of people could learn a lot from this kind of humility, accountability, and honesty. Good luck everyone.
I fail to see how the dollar/yen is the cause of Toyota's woes versus betting the future of the company on a bubble-era demand for autos that was never realistic and could not remain on an upswing. Now that the US consumer is out of credit, reality is staring Toyota in the face and they don't like it. Nobody complained that demand was too strong for the past eight years, though. They were all chasing that last marginal buyer no matter how ridiculous it got.
as an american ex-pat living overseas, i wouldn't count out america as defeated...especially it's culture.
the fate of america rests in its citizenry. there are some great americans out there that see the big picture and are raising their voices. it only takes a few to instill the vision, along with the execution, in order to make great change for the better.
As much as I share your appreciation of the nature of our country, it's citizenry are mindless zombies right now, with a good case of denial. Even the most simple conversations I attempt to have with people on these subjects have most of them looking at me like I'm speaking Esperanto.
like the great george michael once said, you gotta have faith...
but, it is tough to have these talks with people. but, you'd be surprised that you'll find the same difficulties in many other places around the world.
the great mark twain once said "faith is beliening in what you know ain't so".
touché!
"ya gotta believe!" -tug mcgraw
Make mine a doppio esperanto and maybe we can find common grounds.
i wouldn't count out america as defeated...especially it's culture.
can you please tell me, where is this, so called American culture; in its centennial warmongering; its blatant seizure of the globe via its army bases; half a century of global warfare ( [ Korea, Iraq ( Iran maybe ) ] ); threatening the world IF the dollar loses its reserve status. Oh, but if you mean culture, as culture; im not sure Jerry Lewis and Brittney Spears classify as culture. ( Again no offence; but this is how it is; i mean why bullshit one another ). America HAD culture 50 yrs ago, but lost it when it stopped being a country and began being a marketplace ...
What he said.
I will add, Cheeky, that your last sentence explains the first one.
Cheeky, let me know where to send the residuals for my t-shirt sales with your quote
America HAD culture 50 yrs ago, but lost it when it stopped being a country and began being a marketplace ...
This is going to be a big seller.
Cheers,
Pigpen
LOL pigpen ; no need to; you can keep it all; im pretty much settled as it is ...
maybe not Jerry Lewis and Brittney
but don't overlook the Olsen Twins
Was it Jon Stewart who said
the only thing we export now
is consumption
and that also dried up a year ago; now the main export is $-hit ...
can't dried $hit be used as fuel?
hey, why are we still in Iraq?
You know, 60 years ago people stopped dying of consumption. They've started again!
try weapons/aircraft
"Centennial warmongering"? huh? waging war once every 100 years?
as for culture? well, Mark Twain, Louis Armstrong, John Coltrane, Duke Ellington, Miles Davis, Jimmy Rodgers, Hank Williams, Elvis Presley - just a tad more influential (read: copied around the world) than the examples you cited. If you aren't familiar with them (and many more my hands are too tired to type) - you should get out more.
from where i come from; that doesnt constitute as culture; pop-culture maybe; but not culture. Culture is; well let wikipedia tell you what Culture is... http://en.wikipedia.org/wiki/Culture ( this is more of a interdisciplinary article, but you wil et what im trying to tell you ). Mozart is culture; Bach is culture, Michelangelo is culture, Mallarme is culture ( just to name a few out of 1000s ); Elvis; he was a musician who was limb. Well maybe your definition of culture is Anglo-Saxon, while mine is more of a Continental; so we might not agree based on paradigms of our definition; but consensually; i think Anglo-Saxon paradigm ( with a few exceptions of course ) does not suit me, or most, in their view on what a Culture is.
Wasn't Vivaldi the pop-music of his day, yet considered "culture" now?
The mass-media of the last few decades does not define US culture, nor is much of garbage promoted by the State Controlled Media.
The US still has culture, but very few of us are tuned into its faint signal since it is being drowned out by the mass-media noise.
good point.
never understimate the time value of "culture"
where do you come from cheeky?
the way you write sounds elitist and holier than thou...i can understand if that's in error if english is not your native tongue. but, it seems your only beef is that you just dislike anglo-saxon culture. and just because "it doesn't suit you" or your definition of what a culture is, doesn't make it any less of a culture. it's different, and that's all.
The difference is that (generalization here) Americans are self-referential to an homogeneous culture. Immigrants adopt to it. In Europe you cross borders and you change cultures. Europeans have therefore to be much more cultural-aware and complex than Americans. Learning at least one foreign language is a first step on that road. This is an observation, not a judgement on any culture.
if you look at american history closely, you will notice that immigrants have defined american culture. perhaps in a post 9/11 world, that has changed, but it's too early to decide that moot point.
(as a sidenote, two (european) immigrants that are distinguishable for defining the (perhaps negative) perceptions of american "culture" and foreign policy of the last 40+ years are none other than henry kissinger and zbigniew brzezinski)
your observation is fair, but i wouldn't say that europeans go much further than americans in being culturally-aware and complex. they are forced to by their own history and geography and need for international trade. there are quite a number of europeans that remain ignorant (just as many other people around the world), only speak one language (" "), and are racists (" ").
cheeky, i find it perfectly fitting that you have to reference wikipedia for a definition of culture. if you would have read the wikipedia article, then you would realize that you contradict yourself. but i digress....why can't you explain in your own words what culture really is?
well, you try...but your attempt at citing some dead (albeit great) musicians and artists as examples of culture fall far short of what culture is really all about. at least in my humble opinion.
but, the only point you have proven is that there are different threads interwoven into the much broader tapestry of culture. pop and "non-pop"...
but i digress....why can't you explain in your own words what culture really is?
a) i dont have a semester worth of time
b) you dont have the necessary pre-knowledge ( i suppose )
c) i do not own ZH and cant write a 10000 page response to your question
d) you can not simplify the answer to the question " What is culture ? "
e) oversimplification is deterioration of the subject
f) you oversimplified your response to my original post
g) the term can relate to the vast area of phenomena
i) some things i find a priori and take them as universally known ( because i do not know what the quantity of those who know them is, so i find them universal )
Oh; and there is no " holier than thou " attitude here my friend; just a 0 tolerance policy towards making thing simple just so they could suit a simple mind ( no offence ).
But if you want a draft of what a culture is it can be summarized this way; A set of events which constitute the present state. (i know i painted it wide; but you can pretty much go on from here )
i call your ad-hominem...and i raise you.
you succeeded in wasting my time with 11 lines of text that say nothing other than that you are a presumptuous twit. (offense intended)
and besides, you are the guilty party of over-simplification by listing mozart, bach, etc as "culture". plus, a lot of your comments that i've read for several months now are quite simplified (and derogatory). and simplified is fine, because the world is only as complex as you make it.
your closing says much more about your mindset, which is not off the mark, but yes it's way too wide as you point out. you've succeeded admirably in summarizing history, of which culture is a sub-category.
perhaps clarifying where you come from -- as you yourself initially highlighted as the basis for your perception of culture and on which you have been questioned -- would better give the community an understanding into how you view culture the way you do.
notwithstanding your answer, i'm satisfied with ending the culture debate here. you've proven what i intended to demonstrate.
Great list 86934. All huge influences on me. I was born in 1959. Name someone born after that year. Or for that matter, after 1969.
You be so right on with that rap man. Hell, I don't even see kids playing outside anymore. We done replaced our birthright with a credit card. Shee it!
Well then, at least we did successfully adopt one prominent feature of European culture: warmongering. Europeans lecturing about warmongering is amusing considering how we pulled their warmongering asses out of the fire twice in one century.
American culture? WTF?
If anything looks good at all: buy it, corrupt it, package it, market the fuck out of it, ram it down everyone's throat.
Repeat above over and over until extinction.
No, it's the American culture of individualism, of being able to take risks and reap the rewards in your personal life, of not being pigeon-holed in a particular caste or strata, of optimism about the future which arise from being free to make your own decisions, to pursue your own path, to succeed or fail on your own merits, to take advantage of equality of opportunity, not equality of outcome.
You can surely argue any or all of those points, but they have been historically by and large uniquely American, and cornerstones of what constituted American exceptionalism, a vital part of what helped drive the largest expansion of wealth and standard of living the world has ever seen in the last 50 years, and certainly a more accurate representation of the US than the hilariously-stupid historically-ignorant gobbledygook in that last sentence of yours.
american culture is no doubt anglo-saxon at its core, but also a collage of other immigrant communities primarily characterized as monotheistic, capitalistic, materialistic, and individualistic - and also defined by a penchant for risk-taking.
A lesson that should be taught to US CEO's:
1) Humility
2) Honesty
3) Honor
Instead, we get lies, bigger lies, bigger frauds, more lies, additional lies, cover-up lies, lies of embelishment.......the list goes on.
The USA has a very hard time facing reality. Most of her citizens are simply ill-prepared.
it's a lesson that should be taught to everyone, irregardless if you're a CEO. and, it's up to good parents/family and/or good community role models to teach these lessons.
character is developed at such a young age (16-18 and younger) that it hardly makes a difference in the mindset and behavior of much older individuals (barring some traumatic life-changing experience or awakening).
this is not just about the USA.
most people in america just have no idea what's going on overseas or what's being reported in foreign news to comprehend that america isn't alone in this plight. it's a world-wide problem.
mindless zombies....as exhibited clearly last week with CNBC running the report "Should you spend or should you save? See what the world's wealthiest are doing after the commercial break." Lemmings off a cliff, but hey at least your 10mpg better vehicle was worth taking on another 20k in debt!!!!
Looks like Toyota will pull its F1 race team.
guess again http://www.autosport.com/news/report.php/id/79109
that won't matter
http://rumors.automobilemag.com/6590346/motorsports/fernando-alonso-officially-replaces-raikkonen-at-ferrari-f1/index.html
tell me something i don't know ( there is a rumor going round the paddock in Suzuka that Hamilton might leave Macca if Kimi signs the deal with them and if Merc buys into Brawn; now thats a shocker )
Yes indeed, lots of rumors. I even heard that Toyota was looking at Jenson Button. They say its a buyer's market so anything can happen.
FYI Julian Robertson currently on Bloomberg TV
from curve steepeners to curve caps
I'm waiting for production of the new GM Trabant to commence!
The average American wage earner is too busy trying to earn enough money to afford their bills to worry about anything outside of their small part of the cosmos. The people who have time to open their minds to more are either 1) Unemployed, 2) Retired or 3)as Daffy Duck would say, "Comfortably well off". #1 is too busy trying to find a way to put food on a table, a roof over his/her head and keep clothes on the back. #2 is too busy taking care of the grandkids because their kids can't and #3 could care less as long as their lifestyle continues.
I agree it will take imaginative citizens, doing creative things and inspiring others to bring a phoenix from the ashes of this dungheap. It will take young entrepenuers with little or no cash but lots of drive to create the things we need instead of the things that our neighbors have and we covet. It will take a return to basics, to repair rather than replace, a yearn for quality rather than quantity. A make do attitude instead of a consume and destroy. We have to stop looking to Washington for the answers and start looking in the mirror and across the backyard fences. K-I-S-S will become our mantra and those who build a better mousetrap will indeed find people knocking on the door.
edit
Better the fourth stage of corporate decline than the fourth stage of cancer. Which one applies to the US?
Post error
yeah...
might be time to buy a Toyota instead of a Ford....
I admire the Japanese culture. When they screw-up big time, they commit seppuku. When our business leaders fuck things up, they sail out on golden parachutes while the taxpayers cover the bar tab.
Please forward to our friends at Toyota.
http://www.ehow.com/how_2149855_perform-seppuku-harikari.html
Also wouldn't hurt if folks at the Fed took a peek.
The Fed!!???!!! the incurably arrogant must be removed forcibly. Seppuku is not in their line at all.
When american leaders fail, they perform Bukaki on their citizens
I like Mr T. - they make great cars and I will always buy them until they fail me like the American ones did. The survival of the fittest and I think Toyota will survive to rule again or at least maintain itself amongst the future competitors.
Toyota-great company to buy from and to work for.
Toyota makes nice cars. Of course the basic model of any automobile is its best representative. All the more advanced cars are made from the basics. Toyota cars are easily repaired. The dealers are low keyed, and give good service. I usually ask for a specific type of vehicle. I has to be cheap and easy to repair; they never try to talk me out of what I want. I drive the car I buy 'til it has 275 -300k, repairing it myself. I do buy the parts from Toyota.
I'd gladly do the same with a GM or Ford. I understand that their cars used to be like that. But not since I have been driving. That's forty years next year.
Oh, by the way. I became my own mechanic by having to repair an American car. You see, it broke so often that I was always fixing it.
I have a friend that works for a financial institution in Japan and he's being laid off in November. I sensed a bit of anti-american sentiment when he said "the dollar is fucked!" Did everyone see the tiananmen square parade? We're fucked.