It's True: Toyota Asks Japanese Government-Backed Bank For $2b
Toyota Financial Services has requested a $2B loan from the Japan Bank for International Cooperation, a government-backed lending institution. TFS says it needs the money to cover the higher cost of borrowing in the US. According to Automotive News [sub], “Toyota may be the first of a string of Japanese companies with high credit ratings to turn to state-backed loans prior to the closing of books for the business year at the end of March.” Toyota’s “implied” credit rating based on credit-default swaps is considerably lower than its current Moody’s rating, as fears grow about liquidity problems across the automotive industry. The money will come from a $5B fund established by the Japanese government to provide liquidity for firms which operate abroad. These funds are said to come from Japan’s $1T+ in foreign cash reserves, the world’s second-largest foreign currency reserves after China. Nissan and Mitsubishi have also said they will apply for loans from this fund.
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How many shares of Citi and BoA did the federal government own in December 2006 when Ford got its line of credit? Was this fund set up by the government for the explicit purpose of helping American corporations compete overseas? Ford has gotten ZERO in government dollars, Toyota has $2 billion. If we use your stretched definition than every single corporation in the world has gotten a bailout whenever it borrows from a commercial bank! In which case it is a little silly to talk about a "bailout buffet" or "welfare", isn't it?
Question- Why is it that we fault the american automakers for building what we wanted in the 90's, and never said two words about it, but took our dividends without reservation? We, the American people, did this to ourselves, and we keep deepening the levels of our hypocrisy by bashing these companies for not changing fast enough, when we are the ones acting just like our government, and just like the corporations, by not changing our fiscal ways in time to avoid this circus? Then we look, as we have since WW2 to other countries first for our efficiency, and write off our former domestic prowess at manfufacturing goods that people actually want, and invest in non-domestic companies, and domestic companies that are shipping jobs overseas..... Whatever. Everytime we point the finger at some executive or bash some auto company for poor management, remember that we as investors chose to take the easy way first, and not be active in our approach to influencing companies by our investment strategies. Since Toyota is borrowing from a "government fund allocation", they are a participant in subsidy like any other corporation. Definitely not to the degree of the American companies, but still making the deal with the devil. Question: Who put up the backing to start the Asian companies, way back when anyway? In Toyota's case, was it only the Toyoda family, or was it the Japanese government subsidizing them? I submit that this has been a long term strategy by the Japanese, and Koreans to economically war against our domestic manufacturers in many industries, and also China is involved heavily also. Why would anyone pretend to believe that "our best interest" is at heart with foreign businesses? And this is beyond automotive, obviously. It started with the defeat of domestic electronics, and now is continuing with automotive. What's next?