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Toyota Faces Ratings Downgrade

Moody’s eyes impact of March 11 disaster.

by on Apr.06, 2011

Work at Toyota plants worldwide has been impacted by the March 11 disaster in Japan.

Already slammed by the March 11th natural disaster that has left it struggling to resume normal production, Toyota may soon be hit with a ratings downgrade by Moody’s Investors Service.

Such a move could add to the maker’s costs at a time when it is struggling under the loss of hundreds of thousands of units of production.  Even before last month’s earthquake and tsunami – and the subsequent Japanese nuclear crisis – senior Toyota officials were warning that they’d need to take aggressive steps to cut costs and boost profits.

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Saying it will take “many months” to get the company’s operations back to normal, Moody’s issued a warning that it is giving serious consideration to a downgrade of the maker’s debt, which currently stands at Aa2, an investment grade that Detroit’s makers can only dream of achieving.

The ratings firm did note that it, “will also consider how quickly the company can improve its profitability despite the negative impact of the disasters.”

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