70 years sounds pretty good, but it doesn't tell the whole story. Toyota was supported by the Japanese government (through subsidies, capital controls and trade restrictions) for quite a few years after it switched over from textile manufacturing to automobiles in 1933. It was even bailed out in 1949 when it had major liquidity problems.
So while the 70 years of no operating losses is technically true, there was a period of time where Toyota was practically propped up by the Japanese government.
The financial turmoil has also hurt carmakers by driving up the value of the Japanese yen, which has risen some 25 percent since summer.
Without the dramatic change in the value of the yen Toyota would still have made a profit. What's interesting is seeing how much faster they are responding to a single missed year than GM is to there approaching bankruptcy.
PS: The the parent company is still posting a $560 million profit so they are a long way from real trouble.
I work in the Nagoya, the Town Toyota Built, though not for Toyota. (Well, to the extent that anyone in Nagoya can be said not to work for Toyota.)
The great thing about Japanese corporate discipline: when GM has a tough year, GM blames the year. No way we could have predicted spiraling gas prices, a down economy, and increased foreign competition. When Toyota has a tough year, Toyota blames Toyota. You can bet that somewhere in the bowels of that megacorp is a team of economists reevaluating their currency hedging strategy, while another team is working 16 hour days coming up with a car that captures the imagination of the American consumer but is priced to move as compared to the Prius.
Keep doing this whole "Learn from failure and overcome it" thing for a few decades and you end up the biggest car company in the world and make the competition look like sniveling amateurs.
There is definitely something to be said about being humble during a crisis. I think if more companies took this view during this time, we'd like exit this "down economy" faster.
Toyota Motor Vehicles (トヨタ自動車), which is what most Americans think of when they think of Toyota, is one of the members of the Toyota Group, which used to be a keiretsu, basically a related family of companies in different verticals. (Toyota is distinct from many Japanese keiretsu in that it is largely concentrated in one vertical.)
There are other big components: Toyota Industries (豊田自動織機) for example, which makes machine tools. Number one customer: well, duh. But they also sell them all to other folks as well.
Now here's where it gets hairy: Toyota Industries owns Toyota Motors (largest single shareholder), but Toyota Motors also owns a quarter of the stock of Toyota Industries.
Now repeat that with another dozen or so major companies which you probably haven't heard of, and any number of minor satellite firms.
This ends up as one big web, which is collectively the Toyota Group. It is very possible for the group as a whole to be prospering while one or several group companies struggle. How they work this out is an exercise in business management and accounting that would boil your brains -- don't ask me, I'm just an engineer (and, er, customer and shareholder and not-quite-employee but as I mentioned disentangling Nagoya from Toyota is like asking for a human body minus all the carbon).
Toyota can ride this out. With a larger non-US presence combined with their cash stockpile they shouldn't be too worried about what's happening now.
The real problems would be: a) oil prices re-spike and people start moving away from cars as a form of transportation toward things like trains/busses; b) after this recession, people decide they don't need new cars that often and hang onto their vehicles a lot longer; c) Chinese auto companies enter the world stage.
I don't think the first two will happen since we'll be back to consumerist exuberance in a year or two forgetting the whole "save for a rainy day" thing and I think oil producing countries have realized that stable oil prices are in their interest as nothing drives fervor for alternative energy like high gas prices.
Young people in the UK seem less bothered about passing their driving test at 17 - university is ahead of them, so there is no point putting money into a car - I went down this route, and am now 27 and still don't drive, and cannot see this changing unless it becomes essential to work or family. The roads are so congested where I live that the car is no longer a symbol of freedom like it had been for my parents.
The UK has a much more effective public transit system than most of the US. Also, the distance scale there lower than it is in the US. These factors together mean that changing driving patterns in the UK may not be matched in the US (personally, I know of anecdotal evidence in both directions, so I expect the difference in the US to be very regional).
By area, most of the US is hard to serve with mass transit. But by population it's tractable -- you don't have to lay bus/rail mesh everywhere, only where it's already dense. The 10 largest metro areas in the US are about 75% the area of the UK with a population 5% larger.
Ok much more likely is that houses near bus/train lines will increase in price and houses that don't even have sidewalks will decrease. Zipcars will rise in popularity and if possible people will actively choose to live near stores in walking distance. Renting on "main street" usa will be popular and some towns might even re-zone to make it more friendly to live near stores rather then surrounded by miles of houses and nothing.
I think it's more of an issue with city growth and layout.
The biggest issue that mass transportation faces in American cities is sprawl. Subways/buses/etc work great in New York and Chicago because they are far more compacted and urban than Houston or LA.
I live in Phoenix, and there's been a great deal of hoopla surrounding the newly launched light rail system, but they'll be lucky if it serves > 1% of the population. Buses are underused here as well, since they have so much ground to cover. For my last job, the bus would have taken over 2 hours and 3 changes, as opposed to a 30 minute drive.
Well, here comes the anecdotal evidence. I think that the light rail will do significantly better than the bus system has - I think that it doesn't have the stigma associated with it that the bus does.
Its intention is to get enough people going from the East Valley to the downtown corridor to take it to lighten some of the loads on the 60 and 10.
I work up at Indian School and Central and will be at least trying to take the light rail from out in Mesa, even though I need to drive 5 miles to the station.
Of course, Phoenix was built as a car town, so I don't think there will ever be adequate public transportation here just because everything is so spread out and there are no real centers of business other than the few downtown Phoenix / Tempe sorts of areas.
“The change in the world economy is of a magnitude that comes once every hundred years,” Toyota’s president, Katsuaki Watanabe, told a news conference.
Uhoh it's the once every 100 years talk. Sounds like Zuckerberg speak.
So while the 70 years of no operating losses is technically true, there was a period of time where Toyota was practically propped up by the Japanese government.
References:
(1) http://www.shmula.com/291/toyota-motor-corporation-company-h...
(2) The economist Ha-Joon Chang also has some good discussion on the Japanese government's involvement with Toyota (eg. http://www.prospect-magazine.co.uk/article_details.php?id=96...)