Posted by: David Welch on May 28, 2009
Toyota’s surprising $7.7 billion fourth-quarter loss isn’t the company’s only headache. Its image has taken a hit, too. The Reputation Institute, which ranks the corporate image of the 600 largest companies in the world, put Toyota at 59th this year. The company was tops last year. Even worse, Toyota ranked behind Honda among carmakers this year. The chief reason, says Anthony Johndrow, managing partner of the Reputation Institute, was the company’s slipping financial results. Toyota lost money for all of fiscal 2009, which just ended on March 31. Honda made money for the year, so the company is gaining clout.
To get back on top, Toyota will need to show better financial results, Johndrow says. But Toyota has said that it doesn’t want to close plants. The company says that when car sales rebound, it will need its workers and factories to satiate pent-up demand. Plus, Toyota has always been loath to cut workers. That will make for a tough test. Toyota said it will lose money this year without a sales rebound, since it plans to pay workers even with slow sales. But if the company must lay people off, its image would take a hit, Johndrow says. That’s because the survey takes into account how friendly an employer a company can be. So unless Toyota can find a way to keep layoffs and losses to a minimum, managing its reputation will be difficult. On the plus side, Toyota’s survey results show that the company is still widely respected, just not like it used to be.