Toyota, GM locked in fight for worldwide supremacy

[pupp1]

Full Article Here
Toyota, GM locked in fight for worldwide supremacy
By Christine Tierney and Ed Garsten The Detroit News

Tim Larsen / Associated Press

Employees leave the General Motors plant in Linden, N.J., which will be idled indefinitely in April. GM will close a van plant in Baltimore in May. The company has too much surplus production capacity in North America.

TIJUANA, Mexico -- Just after 10:30 a.m. on Feb. 1, the assembly lines at Toyota Motor Co.p.'s brand-new truck factory stopped as Japanese executives and hundreds of Mexican autoworkers gathered for an opening celebration, followed by a buffet of tacos and cactus salad.

Three thousand miles away, in Linden, N.J., a sense of resignation prevailed as General Motors Corp. workers churned out the last few Chevy Blazers and GMC Jimmy sport utility vehicles before the factory grinds to a halt in April.

The contrast between the festivities at Toyota's fifth North American assembly plant and the downsizing of GM's Linden factory, built in 1937, sharply illustrates the Japanese automaker's relentless advance on the older, weakened North American giant.

"Toyota's going to be No. 1. And whether they do it under the radar or by announcing it, it's going to happen," said Maryann Keller, a longtime automotive consultant and analyst.

Toyota already has overtaken Ford Motor Co. to become the world's second-largest automaker. By 2006, it is shooting to sell 8.5 million cars and trucks worldwide, edging close to GM, ranked No. 1 since 1931. If Toyota surpasses GM, that would have a profound psychological impact on the U.S. industry, one of the last manufacturing sectors where Americans still lead. It would also undermine GM's ability to dominate the industry and buffet smaller players such as DaimlerChrysler AG's Chrysler Group with its price wars.

As the two auto giants compete in every segment and every region, GM faces a dynamic challenger in Toyota that is not only similar in scale but also draws strength from its superior profitability.

At the North American International Auto Show last month, Toyota board member Yoshimi Inaba downplayed the automaker's ambitions.

"Every manufacturer, every corporation needs some growth," he said.

At the same show, GM Chairman and CEO Rick Wagoner sounded defensive. "We've been ahead for 73 years in a row, and the betting odds are we'll be ahead for the next 73 years," he said.

But Toyota has the upper hand as GM struggles through its toughest stretch since a near-bankruptcy in the early 1990s.

GM's unresolved problems -- a bloated staff and too many brands -- are now exacerbated by unforeseen factors. Soaring health care expenses, rising to $5.6 billion this year, have eclipsed its hard-won gains in quality and cost control.

Despite GM's assertion that its prospects will brighten in 2006 with the rollout of new large pickups and sport utility vehicles, Wall Street is worried. Debt-rating agency Standard & Poor's is reviewing a possible downgrade of GM to junk-bond status.

With its Triple-A rating and $36 billion cash hoard, Toyota seems unstoppable. It holds 44 percent of the impenetrable Japanese market. In the United States -- the key battleground -- it has doubled sales to 2.1 million vehicles in 10 years.

But the company's success poses new challenges. Toyota executives are under enormous strain to attain their sales goals without compromising the vaunted quality of the vehicles.

Toyota is also keenly aware of hungry rivals in South Korea -- and newcomers in China -- that are charging from behind with good cars built at rock-bottom costs. A reinvigorated Nissan Motor Co. is growing faster than Toyota in North America and has overtaken Honda Motor Co. to become Japan's No. 2 carmaker. Nor do Toyota's bosses underestimate Detroit's will to come roaring back.

Over the years, GM and Toyota have sized each other up. They have observed each other's strengths and weaknesses up close since 1984, when the two companies formed a venture to revive a shuttered GM plant in Fremont, Calif. GM was among the first car companies to wholeheartedly subscribe to the rigorous Toyota Production System to improve quality.

Their rivalry will step up pressure on smaller players, such as Ford, Honda and Volkswagen AG, as it reshapes the industry. In the United States, Toyota is on track to displace Chrysler among the Big Three.

"The idea of the regional Big Three is dead -- the issue now is who will be the Global Big Three," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "GM and Toyota will be two of them. I'm not sure who the third will be."

At the opening of Toyota's Tijuana plant, half a dozen managers from its Georgetown, Ky., factory follow the speeches through translations piped into their earphones.

Despite the language difficulties, they have spent two years in Mexico training local managers and workers in Toyota's painstaking production methods -- the first time Toyota has entrusted such an important task to a plant outside Japan. "We feel a lot of sympathy now for the original coordinators who came from Japan to North America," said Dave Fleischer, assistant manager of production control in Georgetown.

Rivals are redoubling efforts to instill quality in their manufacturing process -- and GM has achieved the biggest strides among the U.S. automakers.

In U.S. quality rankings, Toyota Motor still leads the industry, and its premium Lexus brand perennially wins top honors. But Toyota-brand vehicles slipped behind Cadillac and Buick models in the last J.D. Power and Associates survey of vehicle quality in the first 90 days of ownership. Because of the Toyota brand's strength, its vehicles retain value better than Cadillac or Buick cars, says Raj Sundaram of Automotive Lease Guide. But perceptions tend to catch up with reality.

Senior Toyota officials recognize the danger. "A lot of the things we discuss among high-level executives have to do with quality," Inaba said. "How do you maintain quality during this period of high growth and beyond? This is something we're always discussing."

Despite Japan's reputation for meticulous quality, the biggest recent scandal erupted at Mitsubishi Motors Corp., whose executives face charges of hiding defects.

To instill its standards, Toyota recently opened a Global Production Institute in Toyota City, Japan, where overseas workers are trained by expert Japanese operators on assembly techniques. Rising managers are steeped in the company culture at the Toyota Institute, whose curriculum was developed with the help of the Wharton School.

As part of the "continuous improvement" mantra, Toyota has expanded early-detection systems to nip problems in the bud. It set up a squad of two dozen Japanese troubleshooters in Torrance, Calif., two years ago. Instead of waiting for dealers' reports of problems to pile up, the specialists now check on rare and minor glitches.

"Problems get fixed faster," said Don Esmond, head of U.S. sales for the Toyota brand. "Before, by the time they were explained to Japan and they got back to us, there was a lag.

"Maybe we're a little paranoid, but there's nothing wrong with that."

If not paranoid, Toyota certainly is wary. It shies away from mergers and acquisitions, although it retains a keiretsu, a web of associated companies and suppliers, such as Denso Corp. and Aisin Seiki Co. Ltd.

Steady as she goes

In his autobiography "Shift," Nissan CEO Carlos Ghosn describes Toyota as "imperious and sure of itself."

[GReekBoy]

good article, not biased

[goblue]

GM might be able to stay on top - but it will take two out of the three of these things...

- Union concessions
- National HC, or some system to relieve pressure
- Government overtaking the pension system

Since the chances of this are very slim, I expect Toyota to pull it off. The sad thing however is that if GM doesn't get one of the above, I think Chapter 11 before the end of the decade is possible. I really believe it comes down to the issues above - which allow investing in better product.

[nsap]

I seriously don't think that Americans realize the impact that our economy will take if GM goes under, or looses its #1 spot. If GM does in fact loose its number one spot, that will mean America has lost the last industry it was still number one in.

I was reading an article the other day about Toyota, and it sounds as if they are growing at a rate that they can barely control. If that is the case, one wrong move could severely hurt them (we can only hope!).

I really look for the government to step in sometime and help Ford and GM. Maybe not, but if they want to save our economy from taking a major hit...they will.

If the US car market ever slows down some, I wouldn't be a bit surprised if Toyota looses interest in the US market, and invest their time in China, since their car market is growing faster and faster.

[tgagneguam]

"Toyota's going to be No. 1. And whether they do it under the radar or by announcing it, it's going to happen," said Maryann Keller, a longtime automotive consultant and analyst.

This woman strikes me as a vocal cheerleader of Toyota, and to a lesser extent the Asian automakers. I'm pretty sick of her. I'm not quite sure what her gripe is with the Domestics, but it's a little stale. I unfortunately supported her by buying her book, The Fall of Detroit, which was poorly written and quite uninformed (as one example, she lumped the Koreans with the Asians when speaking of quality, and Hyundai, at the time the book was published, still hadn't experienced its quality renaissance - and Kia is hardly a vision of quality). Her book is infuriating to read and not very well written, though it can be funny to read someone so blindly committed to the Asians (she's a portly, doughy-white woman, for the record). I'd recommend going to the public library and checking it out as opposed to buying it. If you do buy it, it'll only support her car payments for her Lexus RX300, which she raves about on the book jacket.

End of rant.

At the same show, GM Chairman and CEO Rick Wagoner sounded defensive. "We've been ahead for 73 years in a row, and the betting odds are we'll be ahead for the next 73 years," he said.

This is the attitude that concerns me. Nothing is written in stone, and Toyota surpassing GM is a real possibility as soon as next year. I do think it's GM's legacy costs - and not necessarily its products - that are the albatross that I think will allow Toyota to surpass GM. How pathetic.

[Globalist]

Toyota is well positioned to dethrone GM, and based on their past growth number this may happen in the next few years. Taking the pole position in the U.S. is politically risky, and I think Toyota is wise enough not do it soon, or at least not before Americans are psychologically ready for it. However, they may sooner take the pole position globally by increasing their share in other developed and emerging markets.

Concerning GM, I am hoping that the survival instinct will fire more souls than what it appears to be today.

[GMfan2381]

Theres nothing like a threat to get someone moving. And hopefully GM really sees Toyota as a threat. The way things are going right now one of the companies will give. Wether it be Toyota or GM (either being catastrophic success or failure.) Im not counting GM out of this, but they need to do some serious quality control and product rollout. It sucks that the guys who worked at the Blazer and Jimmy plant lost their jobs, but thats one thing we dont need any more of, excess capacity! GM still employs and covers healthcare for more Americans than Toyota does. And now I dont have to see an 06 Blazer with 7k in incentives off the bat.

As for Maryann Keller. I do not like that woman, she is very much tilted in the imports favor, so of course she is going to say Toyota will come out on top. Shes been predicting gloom and doom since the book she wrote. But GMs still on top... And thats by no means set in stone, but GM has had hard times before and Im sure they will come out strong. The changes just need to be a little faster.

[ricers-shaft-big3]

I unfortunately supported her by buying her book, The Fall of Detroit,

Are you sure that you are not talking about

"The End of Detroit" by Micheline Maynard. I too have that book and it is an excellent and very well written book. Although the chronology of the extends upto Dec 2002, it is very prophetic and every thing she has said or predicted has come true so far.

Maryann Keller on the other hand is one of the most respeced auto consultants in the industry. Her breadth and depth of knowledge of all things auto related is immense. What she says is usually how things are an how things pan out to be. I have nothing but the utmost faith in her reports.

http://www.waai.com/professionalachievement/paa2000.asp

[nsap]

Originally Posted by ricers-shaft-big3

Maryann Keller on the other hand is one of the most respeced auto consultants in the industry. Her breadth and depth of knowledge of all things auto related is immense. What she says is usually how things are an how things pan out to be. I have nothing but the utmost faith in her reports.

http://www.waai.com/professionalachievement/paa2000.asp

OMG, you have to be kidding right? Both women are so biased against the domestics its pathedict, and obvious!

No matter what, I am not going to go by what some analyst has to say. In the state that the industry is currently in...anything could happen. Even the unpredictable.

[pupp1]

Originally Posted by nsap

OMG, you have to be kidding right? Both women are so biased against the domestics its pathedict, and obvious!

No matter what, I am not going to go by what some analyst has to say. In the state that the industry is currently in...anything could happen. Even the unpredictable.

Consider the source. (ricers-shaft-big3) sounds like he is an import lover, and would love to believe anything negative against domestic vehicles.And yes both women are biased against the domestics, so much in fact that it totally disgusts me.

[Crazypontiac03]

Its sad to say but Toyota has it all going or them. Gm however doesn't. I'd love to buy another GM but they gotta do something quick before they go under and get bought out buy Toyota or Honda.

[ethayes]

Bias
1. Because if it was a positive article they would mention the GM factory being built in Dearborn for the Buick Saturn and GMC crossovers.

Bias
2. They would mention GM's huge factory and research facility being built in Ontario, Canada for the new Monte Carlo and Malibu.

Bias
3. Because they quote Toyota's cash hoard of $34 billion but fail to mention GM's cash hoard of $25 billion.

Bias
4. Because they fail to mention GM's explosive growth in China, the world's second largest car market, to a 12% market share while Toyota barely has a 1% market share.

Bias
5. Because I don't care how many mini-cars you sell, how many real cars and trucks with prices over $30,000 do you sell? Which would explain GM's huge revenue advantage over Toyota.

Bias.
6. Because they say GM has too may nameplates without mentioning Toyota's full roster. Toyota, Lexus, Daihatsu, Hino Trucks and Scion.

Bias
7. Because they fail to mention Japan's impetaments to imports which in effect represent a government financed industry on the order of Airbus vs. Boeing. A government consortium that protects the industry from rivals, without threat of bancrupcy or takeover with one goal in mind, to take over and be number one.

Bias
8. Because they fail to mention GM's success in international markets like, not only China but Europe, India and Australia.

Bias
9. Because they mention Toyota's plans for growth but fail to mention GM's plans for growth with $5 billion in new factory capacity in China alone. GM's plans to double Cadillac exports every year for the next ten years. And its additional growth plans in every major market that are unprecidented in its history. And its use of technology to utilize those resources and capacity to make vehicles like the Equinox and Solstice.

Bias
10. Because it fails to mention that GM may have a lot of nameplates but most are not global YET. Chevrolet is poised to become a global brand with a goal to sell 2 million worldwide on top of Cadillac's ambitions. With Cadillac and Chevrolet now being introduced in every major market and countries across the globe it shows GM has clear direction.

Not only is our way of life being threatened but our way of thinking is being threatened. This is not only about global competition, it is about rethinking the free market system and taking advantage of it to garner economic dominance, influence and hegemony. It may have already happened for the individuals that wrote this piece but I have hope in America.

[ricers-shaft-big3]

OMG, you have to be kidding right? Both women are so biased against the domestics its pathedict, and obvious!

bias is subjective

facts are objective

what they are reporting are facts

the facts currently are that the yote is slowly but surely sinking its fangs deeper and deeper into GM's jugular

GM is reacting like a giant buffalo fightng a losing battle against a lion. it's still got enough power to harm should a wild kick or random thrust of it horns reach a vital organ in the lions belly. but as you watch the battle you know tht it ain't going to happen; the lion will slowly but surely strangle the life out of th flailing buffalo !

and waiting in the wings are the vultures; waiting to pounce on the giant carcass-the Hondas and the Nissans and the Hyundais.
Toyota is worth 142.3 billion

GM is worth all of gasp 19.4 billion

[ethayes]

Originally Posted by ricers-shaft-big3

OMG, you have to be kidding right? Both women are so biased against the domestics its pathedict, and obvious!

bias is subjective

facts are objective

what they are reporting are facts

the facts currently are that the yote is slowly but surely sinking its fangs deeper and deeper into GM's jugular

GM is reacting like a giant buffalo fightng a losing battle against a lion. it's still got enough power to harm should a wild kick or random thrust of it horns reach a vital organ in the lions belly. but as you watch the battle you know tht it ain't going to happen; the lion will slowly but surely strangle the life out of th flailing buffalo !

and waiting in the wings are the vultures; waiting to pounce on the giant carcass-the Hondas and the Nissans and the Hyundais.
Toyota is worth 142.3 billion

GM is worth all of gasp 19.4 billion

You see, and just like you they want all GM employees and management to think like you to see what is only possible as inevitable. You lost but GM didn't yet. And what about money and market value? Microsoft has $100 billion dollars in the bank and has no idea what to do with it, it has one bad year and it can't give the money away fast enouph to prop their stock up.

[pupp1]

Originally Posted by ricers-shaft-big3

Toyota is worth 142.3 billion

GM is worth all of gasp 19.4 billion

Another good reason to buy American Vehicles.So many people say they hate Ford, but I would much rather see Ford make a sale then any Asian car company.Allthough I would much rather GM made the majority of sales.I wish the American people would wake up and buy American.