• Mar 3, 2009
LR: Toyota Vice Chairman Katsuaki Watanabe, Toyota President Akio Toyoda and Chairman Fujio Cho

Toyota Financial Services has reportedly applied for loans equaling $2 billion (200 billion yen) from the state-backed Japan Bank for International Cooperation. Much of these funds would presumably be used to lend money to new car buyers in the United States, Toyota's largest and most profitable market. If granted, Toyota would join American automakers General Motors and Chrysler on the bailout bandwagon.

Last month, Toyota sold roughly $2 billion (200 billion yen) worth of 10-year bonds at rates much less favorable than what the automaker had previously been accustomed to. That and the aforementioned loan request are actions likely taken to shore up Toyota's falling cash reserves, which some have estimated to be as low as $18.5 billion at the end of January.

It's widely expected that Toyota will post a net loss of as much as $3.5 billion (350 billion yen) for the fiscal year ending in March. This would be the Japanese automaker's first ever operating loss for a full 12-month period, and it further proves how dire the current economic conditions are for all around the globe. Thanks to all who sent this in!

[Source: Bloomberg | Photo by Junko Kimura/Getty]


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  • 55 Comments
      • 5 Years Ago
      LOL, that image is hilarious. *~*~*~* Go TEAM!!!! *~*~*~*
      • 5 Years Ago
      Japanese car-makers are given "strategic economic stimulii" even during the best of economic times.

        • 5 Years Ago
        A fact everybody seems to ignore.....

        • 5 Years Ago
        @Nellydesign: I look at this issue differently. Since I am an American taxpayer, I only care about my fellow Americans and myself being robbed by our government to sustain bad business practices, and I couldn't care less how the Japanese, Germans, French, etc. are robbed by their governments. Just because other countries are socialist doesn't mean it would be a good idea for our country.
        • 5 Years Ago
        @Jake B: Just because one (or ten) other country does something bad, doesn't mean we should do the same. Privatizing profits and socializing losses is a bad idea and a complete rip-off of the taxpayers, no matter how many other countries do it.
      • 5 Years Ago
      They should not have expanded so fast.
      • 5 Years Ago
      Let the bashing/apologies begin! i'm gonna get some popcorn, pull up a chair, and watch the hillarity that is sure to follow!
        • 5 Years Ago
        No bashing. This is because of the unions and the fact that they make crap that no one wants to buy. And Obama.

        Whoops!

        For a minute there I was channeling some effete lost in my own lack of reality Republican apologist history revising I hate anything American German car driving snob.
      • 5 Years Ago
      If you have seen Toyotas full line up, they must be offering thousands of differing configurations in 19 different models. It's too many.
      • 5 Years Ago
      Are you people kidding yourselves? Toyota has been making billions upon billions in profit for years...and you can say they have 18B in cash reserves? HA! That's a joke...keep thinking that company is in worse shape than the big 3.
        KLR
        • 5 Years Ago
        They are a publicly traded company. Their financials are publicly reported. Even just using the Finance search at Yahoo and you can look at their basics yourself.
      • 5 Years Ago
      WTH?

      You just admitted that you think Toyota is in the hole because of bad cars and bad management? I thought the fanboys would never say that. So how is this "nothing like" the situation at GM/Chrysler?
        • 5 Years Ago
        I was referring to GM/Chrysler.
      • 5 Years Ago
      Seems like people here have very thick heads. Yes, Toyota's sales are dropping too, but at least not as bad as Detroit's. Yes, they are the Japanese company the got the worst hit. But if you think Toyota is in the same boat as GM and Chrysler you are delusional. Ford posted a 48% sales drop, GM 53%. Ford at least has interesting models coming about, but what about GM and Chrysler?

      So what you all are saying is, if the economy wasn't in bad shape, Detroit's Big 2.5 would be on par with Toyota. Give me a f**** break.
        • 5 Years Ago
        Nobody's saying that. They're saying that if the economy wasn't where it is now that Detroit wouldn't be asking for government loans any more than Toyota now is.
        • 5 Years Ago
        oldraven, absolutely right. Their balance sheets wouldn't look as good as Toyota's, but then again, Toyota wouldn't be burning through all their cash either.
        • 5 Years Ago
        You're right (**sarcasm**), "Yes, Toyota's sales are dropping too, but at least not as bad as Detroit's." Yea,right. Ford's sales down 48%, Toyota's down 40%. Yea, their drop isn't as **bad** as Detroit's. Yea, right. What planet are you from? Toyota has a completed assembly plant, well, an empty building, because they canceled the tooling order, in Canton, Mississippi. They're burning through cash at a monthly rate comparable to Ford and GM's monthly cash burn, and they're stacking up unsold inventory in various places in Japan. On top of that, the Toyoda family is ripping the current management a new one for building too many plants, period, and too many of them away from Japan, because that violates a Toyota doctrine of not allowing currency exchange rates to influence plant location decisions.
        • 5 Years Ago
        I didn't say Detroit would be asking for bailout money if the economy wasn't bad. But their business model wasn't taking them anywhere either. So, this recession could be a good thing for them (if they are able to recover).
      • 5 Years Ago
      This is nonsense; it's nothing like GM/Chrysler. Toyota's problem is merely economic, when the economic climate gets better they will get back on track. Their reputation is still strong, and they have a profitable business model. That's nothing like GM/Chrysler.
        • 5 Years Ago
        You still believe that GM and Chrysler are in the hole they are in today due to bad cars? Or because they are dead center in the economic crisis which is the US...lol go figure
        • 5 Years Ago
        Bullsh*t. The Toyoda family has been ripping the current management behind the scenes for expanding too fast, making production plant locations based on short term currency valuations, moving Toyota past it's core competency of, in their words, "sturdy, affordable" cars (and putting too much content in their cars), spending too much money on manufacturing R &D, recalling more cars last year than GM, etc. They are in better shape financially than the Detroit automakers, but they're global footprint is causing them to bleed cash, and their credit rating, while much better than Detroit's, is none-the-less falling. Even with all their recent cost cutting, they're burning through their remaining cash.
        • 5 Years Ago
        "Toyota's problem is merely economic, when the economic climate gets better they will get back on track"

        OMG! Dude, that talking point is SO tired! Toyotas problem is the same as GM's. The difference is that you refuse to look behind the curtain.
        • 5 Years Ago
        Toyota's most profitable market is the U.S. And yes, they are in this hole thanks to bad cars and worse management.
        • 5 Years Ago
        +1 Len_A Nailed it.

        Toyota got caught with a bad strategy. Their management made the wrong decsions at the wrong time. Too big too fast. Got greedy. Dropped the ball. Spent too much on new plants and product launches and got caught by Wall St. and their credit bonanza. Their cars may be fine, but that does not matter much when no one is buying any cars.
        KLR
        • 5 Years Ago
        Well, since they are losing money they obviously *don't* have a profitable business model, especially since it's heavily based on profiting from yen/US dollar exchange rates which Japan is not in a position to manipulate at the present. Toyota relies on their almost 50% import rate to make money in the US. They can't build and sell here profitably.
      • 5 Years Ago
      This really puts things in perspective as to how much money these companies put out versus how much they bring in. You're the world's most profitable automotive company and you only have $18.5 billion in available cash? To me, $18.5 billion sounds like money I can't even dream of having, but to them $18.5 billion is (not) enough to justify a loan application. I dunno if I'm explaining it right, but it's just crazy to me how all that works. And being a conglomerate with ties to the Japanese government practically since its inception, I don't see how they wouldn't get the money.
        • 5 Years Ago
        "Companies can't save too large of a nest egg for down times because if they have a large cash reserve they become ripe for a leveraged buyout..."

        Or they get their nest egg pillaged like Chrysler did by Daimler.
        • 5 Years Ago
        Simply put Toyota got caught by the credit crisis while they were spending big to grow big too fast. Too many new plants and product launches. They wanted to be #1 and they got there right at the moment everything collapsed. It is like a marathoner that just ran a PB, yet crashed after they crossed the line. It will be interesting to see how much more money they will require.

        Market consolidation must happen at some point just like in China. Too much capacity with too few customers. Those that survive will get a huge lift in about a year or two.
        • 5 Years Ago
        Companies can't save too large of a nest egg for down times because if they have a large cash reserve they become ripe for a leveraged buyout, where a company hypothetically buying Toyota would use Toyota's cash reserves as collateral with lenders to make the purchase.
        • 5 Years Ago
        At the rate Toyota burned through cash last year (about $60 billion over and above what cash came in from auto sales), even with the cost cutting efforts they've put through this year, that $18.5 Billion is NOT going to last past July or August. Toyota is in much more trouble than any of you Detroit critics are willing to admit.
      • 5 Years Ago
      OMFG WHY IS AMERICA SO COMMUNIST!?!?!?! OBAMA GIVES OUR AUTOMAKERS BILLIONS OF DOLLARZ WHILE FOREIGN COMPANIES ARE ABLE TO COMPETE ON THE BEAUTIFUL WONDERFUL FREE MARKET FREE FROM ANY GOVERNMENT INTERVENTION.

      Oh, wait. The whole world is in recession and every automaker could use some help, no matter where they are from. I don't care if you're a GM fanboy or a Toyota fanboy or whatever. We can all agree things need to get better soon for the sake of our beloved car companies!
      • 5 Years Ago
      Toyota is now learning the hard way. I've been saying for the past 5 years that their quality & quantity issues were going to catch up with them and now it has.

      Though, I'm sure that we'll see the the Toyota defenders making so many excuses for this that we could write a book longer than "War & Peace" with them.

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