Toyota City feels the pain

Posted by: Ian Rowley on December 9, 2008

Japan’s automakers aren’t seeking bailout, but Toyota’s hometown may soon need a helping hand. According to reports in the local media, Toyota City expects its tax income this year to fall 90% short of its target. The city, which is twinned with Detroit and was called Koromo up until 1959, had been expecting to raise $455 million in taxes, but with its resident car maker’s profits slumping, it now only expects to rake in $43 million—not much for a city of 400,000.

Predictably, city officials are taking a Toyota-type approach to the crisis. Rather like Toyota’s recently formed Emergency Profit Improvement Committee, the city plans to undertake a raft of cost-cutting measures, including a 35% reduction in spending on construction projects, reports the Nikkei. That’s not the only thing in common it has with cash-rich Toyota. To see it through the bad times, Toyota City can draw also on $925 million of reserves to cover any shortfall.

Reader Comments

Mark

December 12, 2008 12:09 PM

Japan's automakers have gotten a bailout for decades.

They control 97% of their car market because it is effectively closed to imports. They have a government that systematically manipulates its currency to encourage exports. It has a health care system that takes a huge cost burden from the automakers.

Please don't tell me they don't get a lot of help from their government.

Florida Universities

December 15, 2008 12:44 PM

Nice article. Thank you for posting!

Ron

December 16, 2008 9:08 AM

And what about Hummer, which is basically subsidized by the USA military, or Boeing which is also heavily subsidized by the military / government, or etc. etc.?
Besides, the USA can decide anything it wants about it's own healthcare system, it just hasn't done so.
Don't claim the high ground if you only look one way.

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