Toyota Announces First Operating Loss in 70 Years: $1.7 billion USD

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As Mike wrote a while back, even the Prius can't save Toyota. On Monday the world's biggest car-maker announced that, in contrast to 2007's 2.3 trillion yen operating profit, for the past year the company made an operating loss of 150 billion yen.

Furthermore Toyota confirmed they are freezing the scheduled opening of their new Mississippi factory, which was expected to produce new Prius models for the US market. However, the Australian Federal Government believe their deal with Toyota to build a hybrid Camry plant in Victoria is still on track. They are kicking in $35 million AUD on the proviso that it does proceed.The New York Times reports that Toyota's president, Katsuaki Watanabe told the media conference, that "The change in the world economy is of a magnitude that comes once every hundred years," going on to comment, "We are facing an unprecedented emergency." Such that the company apparently has unplugged electric hand dryers at some offices in an effort to cut costs.

We already know that the US Big Three carmakers of General Motors, Ford and Chevrolet are having to be bailed out by the US Federal government.

But evidence is mounting that Japan's auto industry is facing similar stress. Recently it was also announced that Subaru would be withdrawing its involvement in the World Rally Championships, citing the global financial crisis. This news came hot on the heels Suzuki also pulling the plug on competing in the WRC. And let's not forget Honda's surprise extraction from Formula One racing, announced earlier this month, saving itself $500 Million USD.

The auto boom could be over and maybe this current 1 in a 100 year crisis will serve to refocus the industry away from excess and towards efficiency. Who knows, even the fight against global warming might benefit, alongside hip pockets. But more importantly it should help the personal transportation business gear itself to the little discussed, yet looming, crisis of peak oil.

Via ::New York Times and ABC

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