Wednesday, March 4, 2009

Toyota U.S. Sales Plunge Record 40% as Slump Widens



Is Toyota "viable?"

After all, their sales are plunging. Doesn't that mean they are not making the cars consumers want to buy? And all those sales declines are resulting in operating losses.

So, again, the question is, "Is Toyota 'viable?'"

These questions sound silly to most people because most people--including U.S. lawmakers--would consider Toyota a model of "viability." Yet this exposes the double standard that exists in America.

Ford, GM and Chrysler are just as viable as their Japanese counterparts if one looks at it objectively. Perhaps they are even more "viable."

Whereas U.S. automakers have always had to operate in a market environment unfettered by subsidies or official policy designed to sustain their exports and protect their local markets, Toyota and other Japanese and Korean automakers have had the benefit of closed markets, direct subsidies and use of currency manipulation to protect, nurture and sustain these companies for decades.

Yet despite all this, GM remained the world's largest automaker until recently. Ford and Chrysler have also ranked among the largest and when times were good and consumers were buying cars, Detroit's Big 3 were highly profitable.

Now, however, conditions are terrible and even Toyota is having trouble. Do we hear cries from Japan about their "viability?" Of course not.

It is ignorance, selfish interest and fundamentalist ideology in America that will eventually lead to bankruptcy for GM, Ford and Chrysler, which will mean that more of America's productive, wealth producing capital will be destroyed for no reason.

We are handing other nations our prosperity, for no reason save for sheer ignorance. This is the true legacy of what we will leave our children--a lower standard of living and far greater poverty. We are actually giving away their inheritance to the rest of the world and our policymakers, the talking heads and most Americans seem perfectly okay with that.

2 comments:

Warren Mosler said...

interesting the auto execs don't come down on congress for failing to sustain aggregate demand

Mike Norman said...

Hey Warren, good to see you here!

My take is they're scared. Citigroup CEO, Vikram Pandit came close to saying that, but the auto chiefs have been so beaten over the head by lawmakers they are too frightened to stand up and speak out as to the real problem. they are too busy parrying idiotic comments about "viability." I mean, what are they worried about? Losing their jobs for telling the truth? They're all rich anyway.