By on April 2, 2008

data.jpgChrysler VP (and 37-year Toyota veteran) Jim Press ruffled some feathers at old mother Toyota yesterday when he claimed that the Japanese government had footed "100 percent of the bill" for the development of the Prius powertrain. ToMoCo didn't waste a second refuting the allegation of its former head of North American operations. "I can say 100 percent that Toyota received absolutely no support – no money, no grants – from the Japanese government for the development of the Prius," Toyota spokesman Paul Nolasco tells the AP. The story also notes that while the Japanese government often assists private development projects, particularly for clean energy projects, the collaboration is not typically hidden from sight. That Press' allegation is the first whisper of any public-private cooperation in the development of the Prius could be an indication that he might not be working with all the facts. The irony of all this is that if our own government's massive public-private green car initiative of the nineties, the Project for a New Generation of Vehicles, had produced the Prius, every politician in America would be falling all over themselves trying to claim credit.

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32 Comments on “Toyota: Jim Press Is A Liar...”


  • avatar

    Who knows… maybe we have Chrysler’s answer to Bob Lutz here.

  • avatar
    KatiePuckrik

    What I don’t understand is why Jim Press would give up a cushy number at Toyota for the trainwreck Chrysler? Does he know something we don’t…..?

  • avatar
    CSJohnston

    If the company received subsidies to build an advanced powertrain who cares?

    Anybody looked into aerospace, defense, agricultural or entertainment industries lately?

    CJ

  • avatar
    jthorner

    I’m glad you mentioned the “Partnership for a New Generation of Vehicles” (which is the correct name). It seems that almost everyone has forgotten about that Bill Clinton era boondoggle.

    For chuckles and groans you can read one of the official interim reports from 1996 here:

    http://www.ncseonline.org/nle/crsreports/energy/eng-9.cfm

  • avatar
    John R

    “The irony of all this is that if our own government’s massive public-private green car initiative of the nineties, the Project for a New Generation of Vehicles, had produced the Prius, every politician in America would be falling all over themselves trying to claim credit.”

    Oh my God, yes…

  • avatar

    KatiePuckrik :

    What I don’t understand is why Jim Press would give up a cushy number at Toyota for the trainwreck Chrysler? Does he know something we don’t…..?

    It probably had a lot to do with money. While we don’t know what Cerberus offered him to lure him from Toyota, his salary there wasn’t anywhere near what his counterparts in the American auto industry made. I wouldn’t be surprised if they doubled or tripled what he was getting.

    Just for reference, Toyota doesn’t pay its execs like American auto companies do, nor do they break out individual executive salaries. In the 12 months ending March 2007, Toyota paid its top 32 executives just over $12m in salaries combined.

  • avatar
    Captain Tungsten

    PNGV is alive and well, and known today as FreedomCar

    http://www1.eere.energy.gov/vehiclesandfuels/about/partnerships/freedomcar/

    Quite a bit of technology has been developed under the banner of these two programs, but It’s not obvious how much has transitioned into production.

    I can tell you that the implementation of a magnesium engine cradle on the Z06 Corvette was directly enabled by FreedomCar

    http://www1.eere.energy.gov/vehiclesandfuels/pdfs/alm_05/2g_osborne.pdf

  • avatar

    CSJohnston : If the company received subsidies to build an advanced powertrain who cares? Anybody looked into aerospace, defense, agricultural or entertainment industries lately?

    Thank you very much. Its not Toyota’s fault Detroit lacks a (profitable) deliverable from the Project for a New Generation of Vehicles.

  • avatar

    I was about to “challenge” Mr Press yesterday, but felt silly. Given his position at Toyota you’d think he would have deep knowledge of any such official Japanese support – and then my little anecdote would be inconsequential in comparison.

    I was in Japan in late 2003 to check out the 400h hybrid prototype, as well as the prototype for the Gen2 Prius. During those meetings it was made very clear that TMC had set off an enormous R&D fund for the development of what would become the HSD. I’d think it would be very difficult for Toyota to retain proprietary rights to the HSD if it was “100% government funded.”
    Silly of Press, this. He must be looking for government funds, eh?

  • avatar
    d996

    I think Press would have had knowledge that no one outside of Toyota could know. He may be talking about indirect subsidies that Japan Inc may have directed towards Toyota. The best part of this story is that the rhetoric may start to heat up between Toyota and Detroit. I hope he runs his mouth as fast as a hemi sucks the gas out of a fuel tank.

  • avatar
    timd38

    Has anyone heard of USABC? It the US gov way of funding the same stuff as the Japanese.

  • avatar
    tonycd

    “Just for reference, Toyota doesn’t pay its execs like American auto companies do, nor do they break out individual executive salaries. In the 12 months ending March 2007, Toyota paid its top 32 executives just over $12m in salaries combined.”

    And by the way, Toyota deserves a ton of credit for this. In this case, the American Way is dead wrong.

  • avatar
    50merc

    “Just for reference, Toyota doesn’t pay its execs like American auto companies do…” Well, it’d better get with the program, or Toyota will find itself losing market share and struggling to make a profit. Does Toyota think competent managers will work for merely 20 to 40 times the average wage?

    It’s an example of Japanese and American cultural norms. Seventeenth-century pirate ships were run with a better sense of community than is found in our corporate boardrooms.

  • avatar
    Paul Niedermeyer

    KatiePuckrik :
    What I don’t understand is why Jim Press would give up a cushy number at Toyota for the trainwreck Chrysler? Does he know something we don’t…..?

    Rumor has it that Press’ “back end payout” (after Cerberus unwinds its Chrysler deal) is $52 million. True or false, he undoubtedly got a deal along these lines: much higher salary, and a big chunk at the end. That’s American style capitalism at work.

    Stein: Silly of Press, this. He must be looking for government funds, eh?

    My sentiments exactly. And I agree with you, that I was highly dubious of his assertion yesterday. Should have called it out. The “100%” part was the tip-off. Even if they got some assistance, it certainly wouldn’t have been 100%.

    Maybe just being in the same interview with Lutz has a rub-off effect.

  • avatar
    windswords

    tonycd:

    “Just for reference, Toyota doesn’t pay its execs like American auto companies do, nor do they break out individual executive salaries. In the 12 months ending March 2007, Toyota paid its top 32 executives just over $12m in salaries combined.”

    And by the way, Toyota deserves a ton of credit for this. In this case, the American Way is dead wrong.

    You are only thinking about dollars (or yen). There is more to compensation than that. And the Japanese pay their executives in more than just money. Just look it up. It’s the only clear way to see what the difference is. By the way does anyone know how much it costs to join an exclusive golf club in Japan?

    From the autoextremist web site:
    http://www.autoextremist.com/on-the-table1/

    “We told you Press can change his stripes at the drop of the hat, and now that he’s “Captain America” in his new role at Chrysler it wouldn’t be beyond him to exaggerate to make a point. The Japanese government’s close links with its auto industry, however – particularly with Toyota – are well known, so we’re choosing to believe Press on this one. It may not have been “100 percent,” but it sure as hell wasn’t a passive role either.”

  • avatar
    jaje

    Press took this job so he could retire when Cerebus breaks up Chrysler. He is just changing his note and acting like his peers in the Big 2.8. Remember – there’s no accountability and no one ever calls them on their wrongs.

  • avatar
    Skooter

    C’mon people. It is pretty much known that Toyota is Japanese government backed.

  • avatar
    Skooter

    “In the 12 months ending March 2007, Toyota paid its top 32 executives just over $12m in salaries combined.”

    These poor guys only averaged 2.67 MILLION each?

  • avatar
    Paul Niedermeyer

    Skooter: These poor guys only averaged 2.67 MILLION each?

    $12 million divided by 32 = $375k each. Note: Engage calculator before writing post.

  • avatar
    Queensmet

    If Cerebus had hired a Japanes born and raised exec….. Oh no wait that would not happen. The Japanese actually have loyalty to their company ahead of their wallet.

  • avatar
    d996

    Oh yeah that famous Japanese worker bee loyalty- that worked out real well for them in WWII.

  • avatar
    rtx

    While a senior exec at Toyota would appear to make a lot less then his counterpart at a big 2.8 company he will also have stock options which are a matter of record and appear in the annual prospectus which Toyota sends out to its shareholders. (Toyota ADS shares can be purchased on the NYSE)
    Toyota also owns a percentage or all of its suppliers and a company known as Toyota Tushu which acts as a middleman to the manufacturing plants and looks after all supplies to the plant. This is where the real money is made as Tushu takes a markup on everything coming in to make the final product. Final profit on vehicle = Selling price – (all parts and supplies + labor + facility costs)
    Profit on each vehicle is actually very small because of the inflated costs of the supplies going in to its construction.
    If it sounds like legal money laundering thats because it is. The Japanese have been doing business for hundreds of years and ownership of its many companies has become very complex and intertwined.
    Japanese executives are given some ownership in to these exclusive supplier companies and thats where they make their real money.
    They are not suffering financially but still make no where near the criminal compensation which the big 2.8 execs vote themselves. Why haven’t 2.8 shareholders launched a class action lawsuit against the criminals who are stealing their investments blind by granting these outrageous salaries to themselves and their buddies?
    All it would take is one successful lawsuit and one bigshot in jail (think Conrad Black) and it would shake up the rest of these crooks.

  • avatar
    oboylepr

    From the autoextremist web site:
    http://www.autoextremist.com/on-the-table1/

    “We told you Press can change his stripes at the drop of the hat, and now that he’s “Captain America” in his new role at Chrysler it wouldn’t be beyond him to exaggerate to make a point. The Japanese government’s close links with its auto industry, however – particularly with Toyota – are well known, so we’re choosing to believe Press on this one. It may not have been “100 percent,” but it sure as hell wasn’t a passive role either.”

    Fairly typical comment from De Lorenzo. he has a burr up his butt about Toyota anyway. Even if the Japanese government did pay for it, so what. The way De Lorenzo and others go on about it you would swear it was a crime or it somehow casts a negative shadow on Toyota. Sounds more like wishful thinking to me. Besides, I think De Lorenzo is lamenting the fact that the USG does not do likewise for his precious GM. So much for the “bare-knuckled,unvarnished high octane truth” he likes to believe his website provides.

  • avatar
    Bancho

    rtx :

    That sounds a lot like their compensation is tied to the success of the company. I don’t see a problem with that manner of compensation at all.

    d996 :

    What did that comment have to do with the topic at hand?

  • avatar
    jthorner

    “I can tell you that the implementation of a magnesium engine cradle on the Z06 Corvette was directly enabled by FreedomCar”

    Oh great, taxpayer subsidies that were supposed to lead to world class fuel economy end up enabling the gas guzzling Z06.

    How many taxpayers would be happy to know that is what they paid for?

  • avatar
    d996

    Bancho- I know, it was a stretch but it was in reference to the unwavering loyalty of the Japanese to their employers, country or leaders. My comment is unfair but it always irritates me when people state that such and such nationality are the best workers, nicest, smartest etc. The comment was meant to belittle people that hold up the Japanese auto industry as infallible. I just think that people around the world are pretty much the same, to say that any one group is substantially better than any other is misguided.

  • avatar
    Bancho

    d996 :

    So on our side in the US we currently have 0 loyalty on all sides of the equation. Maybe, just maybe it’s worth looking at doing things a different way. Relations between all factions in the current US auto industry are disloyal, distrustful and disingenuous. Somehow executive compensation *must* be tied to performance in a meaningful way and in this case, Toyota seems to be doing it better..

  • avatar
    Geotpf

    Absent some sort of documuntation confiming his story, I’m going to have to say Press is full of shit. How would the Japanese government give money to Toyota in secret? I don’t buy it.

  • avatar
    d996

    Bancho:

    Yes, you are right there is no unity in the US auto industry, but the US is not a homogeneous society that for the most part blindly listens to authority. Self interest is at the heart of capitalism and in the auto industy it has almost destroyed it. Toyota has for the most part just copied the US model and executed it much better.

  • avatar
    Captain Tungsten

    @jthorner:

    So how would you get production experience with a brand new technology that enables dramatic mass reduction? Please, inform the group. More taxpayers than you think support such projects.

  • avatar
    jthorner

    @ Captain Tungsten

    GM has at various times in it’s history been massively profitable and has introduced new technologies without government funding.

    The point of Freedom Car and it’s predecessor was to get big fuel efficiency gains into the market. Clinton originally sold the idea that instead of ratcheting up fuel economy requirements (CAFE) the government needed to help improve fuel economy of the fleet by funding a massive industry improvement project and by setting aside normal anti-collusion regulations. The idea sounded good enough, but the simple fact is that it didn’t work. During the 1990s CAFE standards stopped getting tighter and the fleet average fuel economy stopped improving. The big money project which was supposed to have produced a new generation of automobiles by now has as it’s star accomplishment a niche component for a car absolutely nobody needs.

    Magnesium is an expensive (and flammable!) metal which has often shown up in niche automotive applications. Honda, for example, makes manual transmission cases from a magnesium alloy for weight reduction purposes. Building the Z06 engine cradle out of magnesium is hardly an earth shattering technological tour de force.

    Now if Freedom car had led to the new Malibu being built largely out of carbon fiber and tipping the scales at under 2,000 lbs while still being priced competitively then I would be impressed. But a government funded hundreds of millions of dollars project spitting out a magnesium engine cradle for the Z06 …. you gotta be kidding. The know how to make magnesium alloy parts has been around for a long time.

  • avatar
    Captain Tungsten

    The mag cradle is an example, by no means the only success. And the thin wall casting process is the new technology, not the material itself.

    Aluminum is “flammable”. Shall the industry stop using that material?

    And low cost carbon fiber research is being pursued as part of FreedomCar, along with high volume mass production technologies.

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