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Quake Sends Toyota Profits Plunging

Quake, strong yen raising serious questions about Toyota continuing production in Japan.

by on May.11, 2011

Good news, but mostly bad news from Toyota's CEO Akio Toyoda, as he reveals a 77% decline in profits.

This is an updated version of the report initially posted.

Slammed by a devastating earthquake, tsunami and subsequent nuclear crisis, Toyota Motor Co. says its profits for the first three months of 2011 plunged 77%, dipping to their lowest levels in nearly two years. Net income came in at 25.4 billion yen, or $314 million, down from 112.2 billion yen during the same period in 2010.

Though the maker said it is speeding up efforts to restore its global production network to full operations, Toyota officials warned they won’t have a full sense of just how big an impact the March 11 disaster will have on future profits for some time.


The quake alone wasn’t the only problem shaking Toyota’s traditionally solid finances.  The strong yen has made it increasingly difficult to export from home market plants, leading CEO Akio Toyoda to acknowledge, during a Tokyo news conference, that, “I fully understand that we can’t go on with just a desire to protect manufacturing in Japan,” Toyoda, 55, said.

The quake-spawned crisis put a downward spin not only on the final months of Toyota’s fiscal year, which ended on March 31, but hints at further problems ahead.  With some lingering effects likely to be felt through year-end, Toyota is all but certain to lose its crown as global sales leader, while profits are expected to be depressed, as well.


Japanese Industry Facing Huge – Potentially Global — Problems in Wake of Quake, Tsunami

Key operations shut in Japan, impact abroad could be severe.

by on Mar.14, 2011

Tsunami-damaged cars that had been ready for shipment to markets overseas.

Much of the Japanese auto industry appears to be shut down, in the home market, in the wake of last week’s devastating earthquake and tsunami, and industry managers say they’ll be making decisions on when to get back to work on a day-to-day basis.

At least one Honda worker was killed during last week’s temblor, with numerous other injuries reported.  At least 1,000 already-assembled vehicles are known to have been destroyed by the tsunami.  What is unclear is how much of an impact the situation will have on the global networks operated by manufacturers like Toyota, Honda and Nissan.

“There will be some effects,” warned analyst Jim Hall, of Detroit-based 2952 Analytics.

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Part of the problem in assessing the impact of Friday’s natural disaster is the extent of damage to the overall Japanese infrastructure.  Communications have been disrupted in some regions, making it difficult to get a full assessment of the situation at some industry facilities.  Further problematic is the ongoing crisis at a three-reactor Japanese nuclear plant that may be undergoing at least a partial meltdown.

At the least, that and additional damage to the island nation’s electric power grid has already forced the imposition of partial, rolling blackouts across the country to conserve power.


Quake, Tsunami Deal Blow to Japanese Automakers

Deaths, injuries, damaged plants; makers curb production.

by on Mar.11, 2011

A fireball erupts from an industrial area after the devastating earthquake and tsunami struck Japan.

The massive earthquake that rocked northern Japan has dealt a hammer blow to the Japanese auto industry, which is still piecing together the impact of what is now believed to have been the worst temblor in recorded Japanese history – and the tsunami it spawned — on the country’s industrial base.

With numerous injuries and at least one death, as well as substantial physical damage, automakers large and small say they will be forced to curb production at more than a dozen plants.

“Today’s earthquake halted production at Japanese automakers in their home markets,” noted a report from Standard & Poors.

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Honda reported at least one death at its technical center north of Tokyo.  Company officials have confirmed one Honda associate died at the company’s Tochigi research and development center when a wall collapsed in a cafeteria.

More than 30 other Honda associates were injured in the Tochigi area from collapsing ceilings and other damage, according to the company, which did not provide any information about damage to the sensitive installation itself.  But Honda has halted production in at least two plants.