US Tries To Maximize Its Equity Return In Bankrupt Automakers, Tells Americans Not To Drive Recalled Toyotas
This whole Toyota recall thing has had us puzzled. The scale of the recall keeps getting bigger and bigger, the hit to Toyota stock greater with every single day. This is extremely uncharacteristic for a company that has taken PR fallout containment (not to mention quality) to an artform. Which, one would speculate, may implicate other forces in this dramatic collapse in everything that Toyota has stood for. The just released announcement from the US Government, in which the government is telling Toyota Owners to "stop driving the recalled vehicles" (can Congress quickly make this into a law please?) which is a defacto endorsement of buy American, and not just any American, but cars made by bankrupt and spun off automakers, in which the country has a major equity stake in via TARP and loan facilities, could be a big clue as to what the behind the scenes play here is. As everyone knows, Cash For Clunkers was a benefit exclusively to Japanese automakers, with Ford barely sneaking into a top 5 spot for cars sold. Well, now it's time for Uncle Sam to demand his pound of flesh; if that involves a "recall" and a huge hit to Toyota's sales and market cap, so be it. One thing for sure: with the various spending freezes, we won't be seeing another Cash For Clunkers for years to come, if ever... Or we may, if and only if, Toyota's reputation has been destroyed beyond measure.