By on August 13, 2008

Not on Toyota\'s watch...Toyota's Senior VP for NA engineering and manufacturing is rooting for the D3. "Competition is good for us," Steve St. Angelo told The Detroit News. 'The customers are the big winners, because it makes all of us better." But there's more to Toyota's largesse than simple concern for consumer choice. "We share many of the same suppliers, so if one of our suppliers has difficulty with either Chrysler, GM or Ford, there's a good chance they are going to have difficulty for us." And because of this interconnectedness, Toyota is helping its American rivals however it can without breaking U.S. antitrust laws. "When any of our competitors want to come to our plants, we let them," says St. Angelo. "We really don't want anybody to go bankrupt." The ToMoCo honcho professes faith in the D3's current leadership. "If you really look at the leaders of the Detroit Three, they're some of the finest leaders that this business has ever had. I hope and I think that they'll come out of this. It would help our company. It would help America. It would help our suppliers. It would help everyone." Not to mention the fact that rooting for Detroit helps Toyota in its quest to morph from evil, America-destroying transplant to leader of the United States of Toyota (as examined by Automotive News [sub] columnist Edward Lapham).

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29 Comments on “Toyota: “We Really Don’t Want Anyone To Go Bankrupt”...”


  • avatar
    toxicroach

    The more cynical part of me thinks that Toyota really doesn’t want 30% of the market to be up for grabs; “competing” against the Big, Fat & Stupid 3 suits Toyota just fine. Giving Hyundai/Kia and the other second tier companies a chance to grab big chunks of market share is a lot more dangerous for Toyota.

  • avatar
    jwltch

    I think they are concerned. The economic ramifications of one of the Big 3 going under could easily cause additional economic woes for the U.S. that could lead to decreased sales in an already unstable market.

  • avatar
    toxicroach

    Yeah I agree jwltch. Why rock the boat when the boat is going exactly where you want it to?

  • avatar
    quasimondo

    I believe Toyota when they say they don’t want Detroit going bankrupt. Too bad their rabid fanbase feels differently.

  • avatar
    1996MEdition

    How does he say all that without bursting out laughing?!?!

    One of the 2.8 going belly-up would impact TOMOCO, but I don’t think it would be more than a flesh wound. Most Toyota components are at least dual-sourced. With Toyota having spread their manufacturing philosophy across their supplier base, these suppliers should have the ability to ramp-up if one falters with the Detroit gangs.

  • avatar
    Runfromcheney

    I think Toyota is trying to put on a “good guy” act so that when the big three go under, they won’t be stuck with an evil reputation and strong public backlash ala Wal-Mart.

  • avatar
    Pch101

    I think that the guy is generally being honest.

    Toyota is dependent upon many of the same suppliers. If those suppliers get hurt, Toyota will suffer capacity disruptions that will hurt their own business.

    Toyota could not possibly add capacity fast enough to take advantage of the complete wipeout of a domestic company. Toyota is much better off if they have the chance to chip away at that business, rather than have it tank overnight.

    Having poor competitors makes Toyota look that much better in comparison to the alternatives. The Corolla seems like a better idea when there is a Caliber parked next to it.

    Toyota cannot gain and could only lose from the political backlash that might come from a Detroit meltdown. They would get some of the blame, but can’t build factories fast enough or support suppliers so much that they would benefit from it.

  • avatar
    Robert Schwartz

    “Too bad their rabid fanbase feels differently.”

    Rabid fan base? Have you ever meet anybody who was rabid about Toyotas?

  • avatar
    gamper

    Toyota would love to see the Big Three go under tomorrow, I dont buy it for a second.

    If those sentiments are so genuine, perhaps Toyo could give GM a low interest loan of say…….. $30Billion

  • avatar
    50merc

    “It would help our company. It would help America.”

    Hmm…didn’t somebody else say something like that? Oh, yeah, it was Engine Charlie!

  • avatar
    whatdoiknow1

    “Too bad their rabid fanbase feels differently.”

    Or stated another way, Satified Costumers!

  • avatar
    Bancho

    gamper :

    I’d really like for the meth addict begging for change on the corner not to die. I won’t, however, give him money because I know exactly what he’ll do with it.

  • avatar
    Stingray

    Pch101 :
    Having poor competitors makes Toyota look that much better in comparison to the alternatives. The Corolla seems like a better idea when there is a Caliber parked next to it.

    You just pwned Toyota with that paragraph.

    If competitors are just a bit better… you’ll see who is really the “poor”.

  • avatar
    oldyak

    our automobile world would be a much sadder place without gm,ford and Chrysler….
    I’m sorry but when I was young, Americans could choose from:
    Ford,
    Chevy
    Pontiac
    Lincoln
    Oldsmobile
    Mercury
    Plymouth
    Cadillac
    A.C.
    Alfa Romeo
    Borgward
    Citroen
    Peugeot
    MG
    Austin Healy
    Triumph
    Renault
    Rover
    Lancia
    TVR
    Simca
    Fiat
    I could go on and on….Great/not so great cars and great neighbors to share car stories with….
    and YES for you younger ones..it was this fun and interesting to be an enthusiast..you would have loved it!!
    The current marketplace is down to just a few!
    And neighbors don’t talk to each other anymore.
    Might as well just give up and let Toyota sell us what they want to!

  • avatar
    monkeyboy

    “I believe Toyota when they say they don’t want Detroit going bankrupt. Too bad their rabid fanbase feels differently.”

    Touche’

    Just as the Yankees, Toyota can do no wrong.

    (As I remember the “1-Ton” Hilux pickup, w/ 2.2L wheezer of an engine)

  • avatar
    Dynamic88

    And neighbors don’t talk to each other anymore.

    Sure they do. They talk about how their GM car is in the shop again, and about how the other guy’s Honda has never been in the shop except for scheduled maintenance.

  • avatar
    Happy_Endings

    I’ve always wondered, exactly how much backlash would Toyota get if the one of Big 3 filed? Sure, there will be some politicians who will blame them and perhaps one will want public hearings on the matter, but most people won’t care. Any Congressional hearing will be viewed like the recent Roger Clemens investigation, simply political grandstanding, and even that line of thinking would only apply to those that do care. From a sales standpoint, those that would blame Toyota for the problems of the domestics would probably not purchase one anyway.

    Basically, most people are going to see right through any blame put on Toyota and instead blame the Big 3 management, unions, product, history, and many, many other reasons before saying “Toyota”. So while things might get a bit uncomfortable for them from a few people, it will be quickly forgotten.

  • avatar
    Mark MacInnis

    My wife is from Kyoto, and tells me their is a supposed 100 year-old bottle of sake at Toyota HQ being saved for a ceremonial toast on the day one of the big three goes under. The bottle was supposedly recovered at Hiroshima shortly after the war ended.

    At that time the Toyoda family vowed to see Japan avenged. GM made the ubiquitous duece-and-a-half military trucks. Ford made the tri-motor planes, Chrysler at the time made military vehicles as well. As all these companies contributed largely to the destruction of Japan, Toyoda vowed to see them destroyed.

    The story is probably apocryphal, but then again…..

  • avatar
    Geotpf

    Prior to the melt down in sales of pickups and SUVs, Toyota’s American plants were all running at about 110% of capacity. Their Japanese plants were doing similiar rates. Now, while their pickup plants are being idled, their car plants are still running at 110% of capacity. That is, Toyota does not, and probably will never, have the ability to really capitalize on one of the Detroit 3 disappearing (although sales of the Tundra might rebound a bit). The real winners would be the two surviving Detroit players, and folks like Hyundai/Kia, all of whom do have plant capacity to spare.

    Toyota’s plan is for it to grow slowly and for Detroit to shrink slowly. A quick collapse of any of the Detroit 3 is not part of the plan, and doesn’t help Toyota in any meaningful fashion. In fact, it probably will hurt Toyota, with things like suppliers going bankrupt in turn and American politicians on the warpath looking for a scapegoat.

  • avatar
    monkeyboy

    I have actually researched some of the ills. Some are the biased import/export regs. If the U.S. protected our industries like Asian countries do, the tide might be in the other direction.

    Odd how in China, on a level playing field, GM is kicking Toyota’s ass.

    So kiss our steel industries goodbye, the electronics manufacturing, tire manufacturing, you name it.

    As you go buy from Walmart, try to find U.S. made products there. Then read bout our current economy.

    We’re all in the same boat. Just different seats. If one of the BIG 3 drown, you WILL be adversely affected.

  • avatar

    monkeyboy:

    “Odd how in China, on a level playing field, GM is kicking Toyota’s ass.”

    Not so level Mr. Bond.

    The Chinese have a deep-seated animosity towards the Japanese, thanks to the island nation’s Chinese invasion (and subsequent barbarity) in WW2. Even so, despite a late start, ToMoCo is catching-up with GM in China.

    More factually, < GM claimed they sold 1.03 million vehicles in China last year (assuming you adhere to GM’s dubious assertion that you should include vehicles made by partnerships in which they owned LESS than 50%). An 18 percent growth rate.

    In ’07, ToMoCo shifted 490k vehicles (without accounting tricks). A 62 percent gain.

  • avatar
    menno

    Dang, Robert, you said it before I could (about how the Chinese generally can’t stand the Japanese so little wonder a 3rd rate car company like GM can out-sell Toyota in China – for now).

    I will make this observation (as I have here at TTAC before). I’ve studied and crunched the numbers for Toyota and others WORLDWIDE and can tell you this; when (not if) GM goes under sooner rather than later, it will be a huge problem for Toyota, Nissan, in fact every player in the US market – because there is not enough worldwide or US capacity to make up the sudden market disruption due to the many plant closures.

    For one, there are limitations on US vehicle types due to crash testing and emissions, so – for example – if GM were to go tits up, Chapter 7, Toyota couldn’t simply re-assign British Toyota Avensis production to try to make up for the loss of one of GM’s plant production in NA. The Avensis can’t be sold in NA! You get the picture. Besides, Toyota (and Honda and others) are smart enough to actually tailor their production levels to need and not leave tons of excess production capacity laying around burning up money (like some 2.801 companies I could name).

    Of course, actually building reliable cars which people want to buy, is the foundation of the whole thing, along with having a brand which is well understood by the buying public.

    Harley has a brand. Porsche has a brand. Toyota has a brand. Honda has a brand. Apple has a brand.

    What the hell have GM got? Ford is a “little” better, but only in degrees. Chrysler?! Pfffft! Give me a break….

  • avatar
    Usta Bee

    Robert Schwartz :

    “Rabid fan base? Have you ever meet anybody who was rabid about Toyotas?”

    The last rabid fan base car Toyota produced was the Supra.

    You could count the Celica too….if you count blonde secretaries as “rabid fans” (they’re all driving Vee Dubs now).

    If Toyota doesn’t want to see GM go Tango Uniform maybe the could sell them some new Corollas re-badged as the “Prizm Part Deux” ?.

  • avatar
    Bancho

    monkeyboy :

    “I have actually researched some of the ills. Some are the biased import/export regs. If the U.S. protected our industries like Asian countries do, the tide might be in the other direction.”

    Yes, because the big 2.x would never have gotten themselves into this situation if we just legislated out imports or tarriffed the hell out of them. The domestics own worst enemy is themselves and *no*one*else*.

    Usta Bee :

    “If Toyota doesn’t want to see GM go Tango Uniform maybe the could sell them some new Corollas re-badged as the “Prizm Part Deux” ?.”

    Have ’em license production of the Prius and call ’em Volts this time.

  • avatar
    Needforspeed007

    Toyota like others have said is probably putting up an act to not look like the ‘bad guy’ here. But yeah, Toyota and other manufactures would not survive if any of the Big 3 went down. Since atleast 2 of them are global and that would make things worse for all manufactures.

    But those Toyota fans someone was talking about though, were probably the fans who blindly follow Toyota and want the Big 3 to go down without a second thought. And yes, I have met and chatted with some of those people to. I feel sorry for their shortsightedness.

  • avatar
    Phil Ressler

    They talk about how their GM car is in the shop again, and about how the other guy’s Honda has never been in the shop except for scheduled maintenance.

    Hmmm…less than a week ago I was having exactly the opposite conversation with an Acura owner who was marveling over how little service my GM product requires compared to his car.

    Phil

  • avatar
    korvetkeith

    Wow, the widespread denial of market forces is scary. If the supply of vehicles immediately drops and the demand stays the same, the price can be adjusted accordingly. ie, happy days for whoever is still selling the product. A lack of production capacity is a temporary problem. Which could be easily overcome with a fattened wallet from profits and ton of automotive workers ready to work for cheap.

  • avatar
    Pch101

    If the supply of vehicles immediately drops and the demand stays the same, the price can be adjusted accordingly. ie, happy days for whoever is still selling the product.

    No, it can’t. Ultimately, prices are determined by demand, because those who demand can find substitutes, whether that is buying a used car or buying nothing at all.

    If car prices were to leap, sales would plunge. That’s particularly true given the current credit crunch — lenders might disregard the price increases, and simply cap their loans at lower amounts relative to the purchase price.

    A lack of production capacity is a temporary problem.

    It would not be temporary if there was a need to replace several hundred thousand vehicles overnight. It takes years to build a factory and train the workforce sufficiently that the company can build a quality product.

    Toyota certainly wants to win, but it is much better for Toyota if it can win through organic growth. This strategy has worked very well so far for the company, and it can continue to work. If they were selling cereal or ball point pens, it would be different, but cars are too costly and complicated for this to be helpful to them.

  • avatar
    capeplates

    Why waste a torpedo when the boat is already sinking – sit back and enjoy the spectacle

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