Toyota Forecasts Its First Operating Loss in 71 Years

by Edmund Jenks | December 22, 2008 at 05:36 am

305 views | 53 Recommendations | 11 comments

Amazingly enough, it is not just troubles found at the “Big Three” that may have an effect at motorsports most visible pursuit – NASCAR!

Nearly 50 teams rely on millions of dollars in supplies and sponsorship from General Motors, Ford, and Chrysler [and now even newcomer, Toyota]. It's a decades old relationship so vital that Brian France, the chief executive officer of NASCAR, wrote congressional leaders in support of the bailout.

"NASCAR is in big-time trouble," said Norris McDonald, longtime motor sports writer for the Toronto Star.

McDonald says more than 1000 team workers have already been laid off since the end of the NASCAR season, and he predicts that if the auto industry isn't rescued, the circuit could lose up to a third of its teams.

(more information on NASCAR Troubles HERE)

ht: Rob Walker

Toyota Motor Corp., the world’s second-largest automaker, forecast its first operating loss in 71 years on plummeting demand, prompting Moody’s Investors Service to consider downgrading the company’s top-rated credit.

The carmaker will post a 150 billion yen ($1.7 billion) loss in the year through March, it said in a statement today, scrapping a previous forecast of a 600 billion yen profit.

“The environment we’re in is extremely tough,” President Katsuaki Watanabe told reporters today in Nagoya. “We’re facing an unprecedented emergency situation. Unfortunately, we can’t see the bottom.”

Moody’s is reviewing the carmaker’s “Aaa” rating on $19 billion of debt, possibly boosting the company’s borrowing costs amid tightening credit markets and the worst U.S. auto sales in 26 years. Watanabe has cut contract jobs, production and executive pay including board-members’ bonuses this fiscal year in a bid to offset slumping demand and a strong yen.

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politisite

at 06:33 on December 22nd, 2008

Thanks for this story

Paschen

at 07:05 on December 22nd, 2008

I do really think there are far more important things on the list of priorities than to save NASCAR.

Jordan Yerman

at 09:38 on December 22nd, 2008

Jarrett Martineau

at 10:45 on December 22nd, 2008

Thanks for this. Good work.

dunkelberg

at 13:49 on December 22nd, 2008

While I have a gut reaction similiar to Paschen, I can see the problem. Living near the traffic headache that is Texas Speedway, it is easy to see how many jobs outside the race track depend on the sport.

Toyota, however, says it plans to keep racing in Formula 1.

Toyota said that it remained committed to grand-prix racing, however. "We have absolutely no plans to withdraw from formula one," a spokeswoman, Yoshie Matsuura, told the Guardian.

When asked about the company's plans for the coming season, a Toyota executive was more vague. "Formula one and motor sport in general are very popular among young people, and we are committed to keeping it that way," he said.

Speculation that Toyota was about to become the second manufacturer to leave formula one has mounted since its rival, Honda, announced earlier this month that it would quit the sport before the start of next season. That decision has left more than 700 Honda employees in Brackley, Northamptonshire, fearing for their jobs and cast uncertainty over the future of its drivers, including Britain's Jenson Button.

panzerlawyer

at 12:05 on December 22nd, 2008

Just imagine. Toyota doesnt have overpaid workers like the UAW.

JeffF (not verified)

at 12:44 on December 22nd, 2008

NASCAR deserves to be deserted by Toyota. While Formula1 and the IRL were introducing innovations like energy recovery and good old alcohol, NASCAR was fighting about the Car of Tomorrow, advancing all the way into the '90s.
Toyota's losses are a consequence of the credit crunch, unlike the US carmakers whose former customers would be deserting them even if they could get credit. More evidence of the flip side of Ronald Reagan's slogan: "an ebbing tide strands all boats".

Peejster

at 13:07 on December 22nd, 2008

Peejster has contributed a photo to this story.

Paschen

at 03:59 on December 23rd, 2008

I did think off the Job loss and came to the conclusion that more jobs could be save elsewhere with that sort of money. Yes diversion is a factor and still there a much cheaper ways to be diverted. I have plenty of Passion and Yet wont let it get in the way with what is right and best For our Society and World at large. Like I say NASCAR is a the bottom of the Priority list as far as I am concerned. Nothing personal here, it is just my Opinion. Good post Ed.

Emilio Lizardo

at 06:52 on December 25th, 2008

Toyota Motor Corporation
[W]as ... founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. Toyota currently owns and operates Lexus and Scion brands and has a majority shareholding stake in Daihatsu Motors, and minority shareholdings in Fuji Heavy Industries Isuzu Motors, and Yamaha Motors. The company includes 522 subsidiaries.

2008-1937=71 ...

So, this would be Toyota's first ever operating loss ... remarkable ...