Toyota chairman predicts government hand-out for GM
Stating that "the auto
industry is a symbol of the United States," Toyota chairman Hiroshi Okuda said
yesterday that he believes that the government won't let General Motors suffer too much longer without a hand-out,
despite President George Bush's statement to the contrary last
month. When asked for a response to the chairman's comments, GM CEO Rick Wagoner shrugged it off, saying he hadn't
seen a check yet and that the government wasn't part of the company's restructuring plans (but that they'd take the
money if someone was offering).
It's interesting given an estimate by Jerry York that GM will run out of cash in 1,000 days at the rate things are going during York's recent stab at GM while speaking at the Society of Automotive Analysts. That's actually just three months shy of three years, making this a possible 2008 campaign issue and an opportunity for G. W. to either make or break the Republican party candidate.
Reader Comments (Page 1 of 1)
Chris Meisenzahl 7:17AM (1/11/2006)
He's probably right. ;-(
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DarkKnight67 8:11AM (1/11/2006)
He should talk ... the Japanese government has been subsidizing them for years now.
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Fred 8:15AM (1/11/2006)
I have just come from Dick Cheney's hospital bed side and can now confirm what Autoblog readers and survivalists eveywhere have long suspected: TERR'RISTS are responsible for GM's impending collapse.* This atrocity will not stand. Let me be the first to say, "Jenna in '08!"
* It may actually turn out to be Rick Wagoner, crappy cars or legacy costs, but don't worry, we're sure no-one will figure this out before the cabinet minutes are declassified in 2105.
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Meek 8:32AM (1/11/2006)
Okuda didn't say hand outs were a bad thing- maybe he's trying to give GM a free hint.
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Jason Chan 9:05AM (1/11/2006)
I agree with you Meek, Okuda never said handouts were bad or whether or not Toyota did or did not enjoy subsidies from the Japanese and the US government. He was simply stating what should be the obvious to the many in detriot. All japanese auto makers get subsidies for building kei cars becuase Kei cars are not profitable. Just like in the US, the US government subsidized the production cost of hybrids.
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jason in boston 9:29AM (1/11/2006)
this is great! about time the government spent on our tax money on bolstering our manufacturing sector, other than for war machinery and food/services/communications for the armed services. going to war solved the economy problem, and joblessness facing 500,000 young people, but, we can't stay at war forever. we need a plan to jump start our economy, and GM certainly needs help. 2 decades ago, chrysler got it's loans, and paid them all back with interest before they were due. our biotech has been abandoned for going into religious areas of stem cells and things religious right can't understand. the computer sector is flopping around, except for US dominance in chip building again. jeb bush won't allow off shore exploration near his state, but both bush's want to dig up what's left of montana, wyoming and alaska. hell, treat GM as a national resource, and get some money into the R & D for CARS and HYBRIDS that's long been lacking. the current management is designing for the oil industry. fire them and get new technical managers back in charge with government funded R & D. the japanese government helped to straighten out their maligned car industry in the 60's , 70's and still pays national health benefits, adjusted prices for resources/labor, and R&D. no one thinks this is too socialism, and acknowledges the briliance of toyota, with its history of government backing. this is good government, industry based on home economy development/need rather than going to war to create a need.
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Paul 9:44AM (1/11/2006)
why should they spend our tax dollars to keep this dino alive. the mney would be better spent on the unemployment benefits for the uaw workers and white collars guys who will soon loose their gm jobs. the best hope is for everyone to continue to buy toyotas and hope that they continue to build factories in the us. we all get a better product then. it seems the future of this country depends on the good will of the asian companies to help us out.
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zverg 9:59AM (1/11/2006)
who is the guy on the left in that picture? It looks like the president of my school :P
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jamie 11:21AM (1/11/2006)
READ MY LIPS.
I have said it before, and I will say it again. It is extremely easy to turn GM around in 90 days. The current crop of white collar banditos have been milking the coffers far too long with no appreciable results. Can their A**es!
In the words of Jerry York, "GM is not moving fast enough."
This situation calls for the company to go into crisis mode
"GM should sell its Saab and Hummer brands, cut its $2 dividend by half and cut the salaries of everyone, from the board of directors to the janitors. Most important, it needs to take a clean sheet of paper approach to restructuring the company."
Sad fact is that GM does not have a crisis mode, nor a battle plan that effectively addresses the situation.
I disagree with York on selling Saab and Hummer. They can be manuevered into highly profitable mini-centers.
Similarily, I disagree with Rick Wagoner's approach of closing factories and laying off staff. They need every one of them to remain competitive. More importantly they need them running at near full capacity to take the bite out of $1227 per vehicle fixed legacy costs. To lower production and sales by one-third would only serve to increase legacy costs to over $1800 per vehicle. Now that is a dumb idea!
If the current team can't solve the problem...dump them NOW! They have incurred a year full of losses with no end in sight.
They don't need any government handouts. What they need is leadership!
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Mike 2:36PM (1/11/2006)
I can't beleave this was posted "the mney would be better spent on the unemployment benefits for the uaw workers and white collars guys who will soon loose their gm jobs." Paul find something else to do with your time you one wants to read your crap!
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Edsel 2:45PM (1/11/2006)
There is something very unsettling about that "thumbs up" photo of Hiroshi Okuda and the other two gentlemen. My intuition is telling me that at one time in Japanese culture, the thumbs up gesture = "up your arse".
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Ed 3:53PM (1/11/2006)
Regardless of our personal opinions about whether or not this is appropriate, I believe he's made an accurate statement. The government will end up bailing them out in one way or another - the most likely scenario is the auto industry copying the airlines and dumping their legacy responsibilities onto the PBGC.
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hitbyastick 4:20PM (1/11/2006)
What they need to do first is jettison Rick Wagoner post-haste. The man is totally out of touch, not to mention uglier than homemade soap.
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iQuack 7:31PM (1/11/2006)
Handouts from the government are at terrible idea. About 20 years ago there were "voluntary" quotas on imported Japanese cars to help the U.S. auto industry and look where that got GM and Ford: luxury Japanese brands that profit from lower volume.
Government help is a horrible idea and when you think about it, was a bad idea to save Chrysler back in 1980. Sure, Lee Iaccocca saved Chrysler and paid back government guaranteed loans early, but the company was ultimately bought by Mercedes. It would have been fine to let Chrysler be taken over 26 years ago or to just go broke and the workers would have gone to GM and Ford whose volume would have absorbed whatever cars Chrysler would have sold.
Come to think of it, a shock like a Chrysler failure in 1980 might have been a good lesson to the labor unions that they could kill the companies they've been screwing over all these decades.
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Nudge 4:58AM (1/12/2006)
Why do I think this is a subtle attempt by Toyota to put the spot light back on GMs problems after the positive publicity from the detroit auto show.
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Kim Hanna 7:27AM (1/14/2006)
According to PBS Nightly News report on GM just the other night the Japanese government pays the health care cost of Toyota workers (GM's cost is over $1,000. per car per year for this) There's the legacy costs for retired workers and GM pays workers full pay for plants they have closed due to increases in productivity. It comes to almost $3,000. per car per year. They can't compete with those costs.
What about free trade agreements? and Japanese subsidies?? The USA makes a big deal about Canadian lumber subsidy but doesn't say peep about Japanese subsidies because they buy most of our debt from deficit spending. There's way more to this than can be posted here. GM makes good products. We have a 1998 Chevy Lumina with 125K miles and not one thing broke on it since we got. It still has all the same light bulbs. All I did was change brake pads and reg maintain. It's a good vehicle with ok mileage. GM made some mistakes on benefits they paid out like pensions; which most companies won't pay anymore in the future ; even IBM.
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