Toyota asks Japanese Government for $2B

[Twentyover]

Yesterday Toyota asked the Japanese Government for $2B in bridge loans.

Some argued last month that the cause of GM's problems was "extrordinarily high (unit) expense."

In any event, it appears that now Toyota has encountered similiar "extrordinarily high expense" and has engaged it's government for loans (through the Japanese Bank of International Cooperation.)

Or the reduction in volume has caught up with them, and their lower unit cost.

I'd guess, if one did not support the GM/Chrysler loans (and they were tonot receive them), and Toyota were to receive loans, then one would be in favor anti-dumping tariffs on Toyotas built in Japan, and a good look would be needed at all parts imported to assemble the Toyota vehicles.

[wmhjr]

Let's be accurate about what they're asking for.

"Toyota, facing an operating loss of $4.6 billion this business year, was seeking a loan of about $2.1 billion through its wholly owned car-loan financing firm Toyota Financial Services, public broadcaster NHK TV reported earlier"

Chronic fear of default is making low-cost funds harder to come by, especially in the United States, even for cash-rich companies such as Toyota.

"Toyota is not in danger. It's out to get the lowest price for funding that the strength of its credit can get," said Yasuaki Iwamoto, an analyst at Okasan Securities. "On the balance sheet, it doesn't matter if the funds are private or public."



This loan is all about the cost of cash - not operating costs of their manufacturing.

Apples and oranges. They're both fruit, but not the same.

[Boyd]

Where I come from, $18billion (GM) is a whole lot more than $2billion (Toyota).

[Twentyover]

.....
"Toyota, facing an operating loss of $4.6 billion this business year, was seeking a loan of about $2.1 billion through its wholly owned car-loan financing firm Toyota Financial Services, public broadcaster NHK TV reported earlier"

Chronic fear of default is making low-cost funds harder to come by, especially in the United States, even for cash-rich companies such as Toyota.

"Toyota is not in danger. It's out to get the lowest price for funding that the strength of its credit can get," said Yasuaki Iwamoto, an analyst at Okasan Securities. "On the balance sheet, it doesn't matter if the funds are private or public."



This loan is all about the cost of cash - not operating costs of their manufacturing.

Apples and oranges. They're both fruit, but not the same.


There are a couple things here- When I suggested that GM's big problems started when cash was drying up, I was told I was wrong. Yet when cash dries up, we find that Toyota faces $4.6B operating loss this year. Compared to GM's $16.3B. Granted an order of magnatudedifference in scale, but no difference in direction.

So GM and Toyota are on the same road, except that GM is further down it. The fact that GM biased profit to cars that didn't sell well in early 2008 pushed them further along the road. Think I readthat Toyota had $18B in operating reserves, so if nothing changes, in about 4 years they'll be going to the Japanese Gov for operating capital, as GM has done here.

While I appreciate the difference between applies and oranges, to me they are both fruit. A division of Toyota is looking for a bridge loan. Does the fact that it's their banking arm make it any more or less right than GM asking for it for operating capital?

[wmhjr]

There are a couple things here- When I suggested that GM's big problems started when cash was drying up, I was told I was wrong. Yet when cash dries up, we find that Toyota faces $4.6B operating loss this year. Compared to GM's $16.3B. Granted an order of magnatudedifference in scale, but no difference in direction.

So GM and Toyota are on the same road, except that GM is further down it. The fact that GM biased profit to cars that didn't sell well in early 2008 pushed them further along the road. Think I readthat Toyota had $18B in operating reserves, so if nothing changes, in about 4 years they'll be going to the Japanese Gov for operating capital, as GM has done here.

While I appreciate the difference between applies and oranges, to me they are both fruit. A division of Toyota is looking for a bridge loan. Does the fact that it's their banking arm make it any more or less right than GM asking for it for operating capital?

It is COMPLETELY different. TOTALLY different.

Toyota makes money on every single car they sell, regardless of the model. The issue THEY are trying to deal with is the fact that credit has slowed, so sales are slow. Their CONSUMER FINANCING arm is looking for cheap credit to extend to buyers.

GM LOSES money on cars they sell. The issue THEY are trying to deal with is that their operating costs are too high, creating negative margin. Their ENGINEERING, MANUFACTURING AND DISTRIBUTION business (the core of the business) is losing money hand over fist. Remember that GMs financing unit, GMAC, was formerly about the only part of the corporation that was profitable. The entire Toyota corporation including manufacturing as WELL as financing was profitable. Prior to now, Toyota has never shown an annual loss since the corporation was formed. GM? Hmmmmmmm......

Simply because they are both asking for money does not remotely make them similar.

Put it a different way that might help explain it better.

Toyota is looking for "cheap" credit (that' exactly what they, and all analysts are saying). The economy is definitely hurting Toyota, just as it is hurting just about every other business. Just because they have a good business model does not make them immune from the effects of this economy. But, they ain't GM.

GM is looking for "any" money that they can get their hands on.

[killer69]

i herd that GM was going back to the well to see if they could get another 30BBBBB illion

so 2 looks like a deal.

[buickfunnycar.com]

Point being is that the global automotive business as a whole is on life support regardless of make or model.
The owner of the Toyota dealer in the automall where I work is throwing $80K at it monthly and has given a drop-dead date of June 1st to turn it around or the doors are closing.

[wmhjr]

Which is why Toyota is trying to get money for its financing arm. They don't have a cost issue to deal with. They just need to sell cars. They want to get cheap money to use as credit to extend to buyers.

GM loses money even if they sell cars. They're not asking for money for GMAC. Heck, they're actually trying to sell GMAC because it was one of the only assets that still had some market value at the time.

That's the big difference.