When Toyota and Nissan both forecast full year losses within the last week, you knew it was only a matter of time before both companies took steps to limit their mounting losses.
For Toyota , the steps include offering buyouts to some of the approximately 25,000 hourly workers in the U.S., further cutting production at some plants in April, and cutting executive bonuses. In short, Toyota is doing everything it can to lower costs without have to lay off workers.
Meanwhile, Nissan and Chrysler are putting their joint car development deal on pause because it is more costly than either company can afford right now. Smart move, given one company just reported a big loss and the other is one not far from sliding into bankruptcy.
Both show we are in a financial crisis squeezing all auto makers. And I don't think it will end anytime soon. Yes, I know that I'm the same person who said on this blog late last year, "this is the worst it will get for auto makers". Boy was I wrong.
So how can I be confident that this auto crisis will not end anytime soon?
When I talk with auto executives, suppliers, and dealers, all tell me they are getting no traction. Dealers see little change in weak traffic in showrooms. Suppliers don't have the receivables to borrow against. And auto makers are still adjusting production line to run at a sales rate of roughly 10 Million.
And nobody is immune to this slowdown. Not the Big 3. Not the foreign auto companies. And not the dealers.
- Toyota to Cut Hours, Offer Buyouts to US Workers
- CNBC.com Special Slideshow: America's Most Ticketed Cars
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- Ford Motor
- General Motors
- Honda Motor
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