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The Pub For General Automotive Related Talk |
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#1 | ||
Regular Member
Join Date: Mar 2008
Posts: 459
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The cash burn rate through 2008 at General Motors, Chrysler and, to a lesser degree, Ford, has been one of the big new stories in the auto business. After a disastrous third quarter, GM was down to about $11 billion and, along with Chrysler, was in danger of having insufficient cash on hand to pay bills at the end of the year.
Meanwhile, Toyota has been raking in the profits for ages now and was thought to have up to $90 billion in reserves as recently as a couple of years ago. The other day, however, John McElroy reported that Toyota may be down to only $18.5 billion in cash with rapidly spiraling debts. The company has spent heavily on new factories and new products in the U.S. in recent years, but saw its sales plummet as much as the domestics in the second half of 2008. Its total current short-term liabilities are now roughly equal to its total current assets, and its cash reserves put the company on par with Ford. In recent months, Toyota has been moving aggressively to cut costs and budgets have been slashed company wide. The automaker famous for avoiding layoffs was also reportedly considering shedding some jobs in the U.S. and UK, but had denied those reports are true. http://www.autoblog.com/2009/01/26/t...llion-in-cash/ Toyota’s Weakening Financials Toyota used to be in such a strong financial position that it earned the nickname the Bank of Toyota. That description no longer replies. Also, many industry observers are under the mistaken impression that Toyota has no corporate debt. That doesn’t apply anymore, either.As part of its ambitious global expansion efforts, Toyota’s borrowing and have debt load more than doubled over the last decade. In 2000 Toyota’s current liabilities* totaled ¥5.5 trillion, right now that stands at ¥12.4 trillion. Although the company still has a solid balance sheet, it’s not as solid as it used to be. Moreover, the company is projecting it will lose money in the current fiscal year, something that has never happened before in its history. This helps explain why Toyota is taking drastic action in the face of the current economic downturn, such as temporarily shutting down all of its manufacturing facilities in Japan. Now, even Toyota has to worry about how much cash it has on hand. In its most recent financial report, Toyota states that it has ¥1.8 trillion in cash, which is roughly $18.5 billion, or about the same level of cash Ford reported in its most recent financial statement. More tellingly, Toyotas total current liabilities (short term) now match its total current assets. In the past, Toyota’s current assets always exceeded its current liabilities. When a company’s liabilities exceed its assets, it has to dip into its cash reserves to make up the difference-unless its operations are generating positive cash flow. But right now Toyota is not generating positive cash flow. This is the same situation that the Big Three found themselves in some years back, but failed to address. Toyota is obviously attacking the problem head-on. But it’s surprising to see how close the company has come to the edge of the cliff. * current liabilities include: borrowing, long-term debt payments, accounts payable and accrued expenses. http://www.autolinedetroit.tv/journal/?p=2431#more-2431 |
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#2 | ||
BF XR6, oh yeah!!
Join Date: Sep 2007
Location: Melton, Vic
Posts: 1,015
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I must say that I find that surprising, the way the media usually carry on most people would think Ford we're teetering over the edge, while Toyota has hundreds of billions. Refreshing to hear the raw facts for once.
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Current ride: 2005 BF XR6 Sedan, Lightning Strike, ZF Auto Previous ride: 2001 AUII Futura Sedan, Narooma Blue |
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#3 | |||
Chasing a FORD project!
Join Date: Jul 2008
Location: adelaide
Posts: 5,114
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also proves no one is safe...
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1996 BMW 740iL V8. TV, phone, leather, sunroof, satnav, all as standard. Now with 19" TSW Brooklands, 2 1/2" stainless steel exhaust, plus more coming soon. |
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#4 | ||
Compulsive Hobbiest
Join Date: May 2006
Location: Ohio, USA
Posts: 1,032
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Well luckily we have the experience of the Big3 to know exactly what went wrong. Obviously, Toyota has been building vehicles that people don't want, and gas guzzlers. They've managed their company into the ground and pay their employees too much. HOW ELSE COULD THEY BE IN THE SAME BOAT AS FORD?????!!!!!!
Yeah, that's some serious sarcasm, but it makes me sick. Let's see how much coverage this gets in the mainstream news. It sure is big news when Ford, GM, or Chrysler have the exact same situation. This is the first I have heard of this and I bet it will be a while before I hear about it on my local news or in a newspaper, where it will be a single paragraph buried on page 9. Steve
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My Filmmaking Career Website Latest Project: Musclin' My XB Interceptor project Wife's 1966 Mustang My Artworks and Creative Projects Site Oil Paintings, Airbrushing, Metal Sculpture, Custom Cars, Replica Movie Props, Videos, and more! |
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#5 | ||
FF.Com.Au Hardcore
Join Date: Jan 2005
Location: Northern Sydney
Posts: 1,908
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Do remember though that Ford has been riding on the wave of the sales of capital assets; namely Jaguar, Land Rover and Aston Martin, which they appeared to have exited at just at the right time.
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#6 | ||
Render unto Caesar
Join Date: Feb 2008
Location: ::1
Posts: 4,222
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Ford still have a long way to go for improvements, which compared to Toyota is good.
Ford can still improve their efficiency of their product development and the product itself. Toyota however are at the peak of efficiency, they are the benchmark, where to for them now? |
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#7 | ||||
FF.Com.Au Hardcore
Join Date: Mar 2006
Posts: 665
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Quote:
Cheers Bud Bud. Quote:
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#8 | |||
FF.Com.Au Hardcore
Join Date: Mar 2005
Location: Newcastle
Posts: 3,246
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Quote:
And, still the media get it wrong. AAP Newswire (a worldwide newsource) continue to perpetuate the falsehood that Ford sought emergency aid...
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BA2 XR8 Rapid M6 Ute - Lid - Tint -18s 226.8rwkW@178kmh/537Nm@140kmh 1/9/2013 14.2@163kmh 23/10/2013 Boss349 built. Not yet run. Waiting on a shell. Retrotech thread http://www.fordforums.com.au/showthr...1363569&page=6 |
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#9 | ||
Where to next??
Join Date: Oct 2006
Location: Sydney
Posts: 8,893
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Out of curiosity is there any way to tell how other manufacturers are going financially???
From the last year, and from what I have just seen on the roads in Korea it is fair to say that Toyota's biggest threat is Hyundai / Kia. Any info of how the Koreans are fairing financially? I know that Ssangyong is in strife but what about the other 2? |
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#10 | |||
FF.Com.Au Hardcore
Join Date: Feb 2005
Posts: 5,052
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Quote:
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#11 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,799
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Quote:
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Daniel |
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#12 | |||
BOSS 5.4L Enthusiast
Join Date: Aug 2005
Posts: 21,907
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Quote:
Since Mulley has been at the helm they have really been turning themselves around. |
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#13 | |||
Compulsive Hobbiest
Join Date: May 2006
Location: Ohio, USA
Posts: 1,032
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Quote:
That is a very good point. Yes, Ford has benchmarked Toyota for years. Now that Ford's quality is equal to and in some cases surpasses Toyota's quality Ford is working to BE the benchmark for quality. Toyota's efficiency is excellent but as they approached sales volumes equal to what GM was once at they started learning the new problems that arise when an auto company gets that big. Toyota started having quality problems they didn't have before and recalls in volumes they never had before. Even Toyota could not maintain previously achieved quality levels when producing such volumes. It is a difficult task. Now, because of the global economy and market conditions, they will have to size themselves to match the market size, just like the Big3 have done. They have invested heavily in financing new plants in the US including one that they have ceased construction of that is to build the Prius in the US. This, along with massive sales drop, is why they are financially stretched. Very few cars are selling, period. It will be interesting to see what kind of repercussions come from lay-offs since it will cause a loss of face. Steve
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My Filmmaking Career Website Latest Project: Musclin' My XB Interceptor project Wife's 1966 Mustang My Artworks and Creative Projects Site Oil Paintings, Airbrushing, Metal Sculpture, Custom Cars, Replica Movie Props, Videos, and more! |
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#14 | |||
Compulsive Hobbiest
Join Date: May 2006
Location: Ohio, USA
Posts: 1,032
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Quote:
AAP? I am not familiar with them. AP = Associate Press, them I am familiar with. I agree, lumping in Ford with the others that have taken financial aid. I confronted a "journalist" about an inaccurate statement he made and he responded by splitting hairs. I pointed that out to him and he never wrote back. Steve
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My Filmmaking Career Website Latest Project: Musclin' My XB Interceptor project Wife's 1966 Mustang My Artworks and Creative Projects Site Oil Paintings, Airbrushing, Metal Sculpture, Custom Cars, Replica Movie Props, Videos, and more! |
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#15 | |||
Compulsive Hobbiest
Join Date: May 2006
Location: Ohio, USA
Posts: 1,032
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Quote:
As stated in that post, it was sarcasm. Yes, you are correct in your statement, that the Big3 were not making money while sales were good. That was a result of putting all their eggs in one basket, trucks and SUV's that were highly profitable and then didn't have profitable product when trucks and SUV's fell out of favor. Ford has been investing heavily in new product and recreating themselves as an auto company. They are hitting the ground running with new innovative products that are very attractive so that when the economy turns around Ford will be at the forefront of the buyer's stops. as far as Ford being "dead in the water", if things begin to pick up in the second half of this year I don't see Ford needing any assistance. If the economy drags on or worsens, yes, I believe they will need assistance. Toyota is at the top of their game. What can they do? "Right-size" is their only option at the moment. Steve
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My Filmmaking Career Website Latest Project: Musclin' My XB Interceptor project Wife's 1966 Mustang My Artworks and Creative Projects Site Oil Paintings, Airbrushing, Metal Sculpture, Custom Cars, Replica Movie Props, Videos, and more! |
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#16 | |||
FF.Com.Au Hardcore
Join Date: Mar 2006
Posts: 665
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Quote:
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#17 | ||
FF.Com.Au Hardcore
Join Date: Jun 2005
Location: Ipswich, Qld
Posts: 557
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Just read that Toyota has recalled 1.35million yaris around the world. For faulty seatbelts and exhaust. They have slowly been having more and more recalls. This will hurt them
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2006 SY Territory Ghia RWD in Seduce
With 3rd row seats, Velour Trim, Alloy scuff plates, deflector, Tinted windows & BF GT Lower Snorkle www.bseries.com.au/2fishingdogs/terry 2004 BA MKI Tradesman Ute 1 tonner in Vibe Tinted windows, Alloy scuff plates. The rest is still stock as a rock www.bseries.com.au/2fishingdogs |
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#18 | |||
FF.Com.Au Hardcore
Join Date: Jan 2008
Posts: 805
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Quote:
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#19 | |||
Compulsive Hobbiest
Join Date: May 2006
Location: Ohio, USA
Posts: 1,032
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Quote:
Thank you, from the "down-under challenged".
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My Filmmaking Career Website Latest Project: Musclin' My XB Interceptor project Wife's 1966 Mustang My Artworks and Creative Projects Site Oil Paintings, Airbrushing, Metal Sculpture, Custom Cars, Replica Movie Props, Videos, and more! |
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#20 | ||||
Compulsive Hobbiest
Join Date: May 2006
Location: Ohio, USA
Posts: 1,032
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Quote:
According to a link in another topic all 2006 and 07 cars. From my previous post, almost prophetically..... Quote:
Steve
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My Filmmaking Career Website Latest Project: Musclin' My XB Interceptor project Wife's 1966 Mustang My Artworks and Creative Projects Site Oil Paintings, Airbrushing, Metal Sculpture, Custom Cars, Replica Movie Props, Videos, and more! |
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#21 | ||
FF.Com.Au Hardcore
Join Date: Jun 2005
Location: Ipswich, Qld
Posts: 557
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Where is your crystal ball. What are the lotto No's for Saturday night.
![]() Heres a link to the new report on the Yaris recall
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2006 SY Territory Ghia RWD in Seduce
With 3rd row seats, Velour Trim, Alloy scuff plates, deflector, Tinted windows & BF GT Lower Snorkle www.bseries.com.au/2fishingdogs/terry 2004 BA MKI Tradesman Ute 1 tonner in Vibe Tinted windows, Alloy scuff plates. The rest is still stock as a rock www.bseries.com.au/2fishingdogs |
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#22 | ||
FF.Com.Au Hardcore
Join Date: Jul 2006
Location: Gren A Waverrey
Posts: 2,371
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THough I doubt it would happen, I'd be happy as Larry (assuming he was happy) if Toyota disappeared. That is only looking at this superficially, but one must dream.
It would be terrible for the industry though.
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#23 | ||||
Compulsive Hobbiest
Join Date: May 2006
Location: Ohio, USA
Posts: 1,032
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Quote:
Mine or your's? ![]() From the above link.... Quote:
Now who would have thought to account for heat in an exhaust pipe???? :evil3: Steve
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My Filmmaking Career Website Latest Project: Musclin' My XB Interceptor project Wife's 1966 Mustang My Artworks and Creative Projects Site Oil Paintings, Airbrushing, Metal Sculpture, Custom Cars, Replica Movie Props, Videos, and more! |
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#24 | |||
Oo\===/oO
Join Date: Jan 2007
Location: Tamworth
Posts: 11,348
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Quote:
He really has done a good job.
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#25 | |||
Get EcoBoosted
Join Date: Jan 2007
Location: NSW: Newcastle, Sydney & Wollongong
Posts: 1,876
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Quote:
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#26 | |||
Peter Car
Join Date: Dec 2004
Location: geelong
Posts: 23,145
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Quote:
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