Toyota Expects Its First Loss in 70 Years
Breaking news (but not entirely unexpected if you’ve been following
the news in the last week):
Toyota Motor, the Japanese auto giant, announced Monday that
it expected the first loss in 70
years in its core vehicle-making business, underscoring how
the economic crisis is spreading across the global auto
industry.
From their President:
“The change in the world economy is of a
magnitude that comes once every hundred years,”
Toyota’s president, Katsuaki Watanabe, told a news conference
in Nagoya, Japan, near the company’s Toyota City
headquarters. “We are facing an unprecedented
emergency.”Mr. Watanabe said the company would respond by suspending
investment in new plants, including the delay in starting a factory
in Mississippi announced last week, and moving some production
lines to single shifts. The company has even unplugged electric
hand dryers at some offices in an effort to cut costs.
Toyota has been letting go temporary workers, but has held tight in
not laying off full-time staff. As the article points out, Toyota
has quite cash cushion ($18B) to ride out slow times. They aren’t a
charity…. how long will they hold on to employees in factories
that aren’t producing vehicles?
This will be interesting to follow. Will Toyota continue to focus
on the long-term during these challenging times? This news is
hardly a repudiation of the Toyota Production System. It just goes
to show that TPS/Lean is not a cure-all for any business.
