Posted by: David Welch on March 3, 2009
In yet another sign that Toyota Motor Corp. is run by human beings, the company’s finance unit is asking the Japanese government for a $2 billion loan, writes my colleague, Ian Rowley. Toyota blames tight credit in the U.S. for its newfound borrowing needs. For all its strength, Toyota is not immune.
But here’s my question: Will we see outrage among Japanese voters and some media as a company hoarding $20 billion in cash asks for government money? My guess is no. The Japanese government and Central Bank have a long history of intervening on behalf of their home companies. The Central Bank has kept the yen weak for years to boost exports of cars, electronic goods and other items to the U.S. So loaning a few billion bob to Toyota won’t raise a hackle in Japan.
Here in the states, however, loaning to U.S. automakers sparks some outrage. This is despite the fact that state governments have showered foreign carmakers with hundreds of millions in tax incentives. I understand the argument. Toyota performs year in, year out. The U.S. car companies have been stumbling for decades.
The sad part of it is that Detroit was finally fixing some long-standing intractable problems. The 2007 labor deal slashed wages, found a creative solution for retiree benefits and the cars are much, much better. All of this was rolling out just as the financial crisis hit. But these days, Americans have little sympathy for home teams that have lost for so long. Detroit’s fixes may have come too late to save all three companies and get the popular imagination to look their way.