2007 November 12 Monday
1 Year Of Toyota Profits More Than GM Market Cap
General Motors used to be the mightiest American corporation. Those days are long gone. Toyota could buy all of General Motors with just 1 year of Toyota profits.
At yesterday’s results announcement in Tokyo, finance chief Takeshi Suzuki said that Toyota now expects to make operating profits of $20.2 billion this financial year, $440 million higher than earlier stated and a figure still considered conservative by analysts. By the end of Wednesday trading, which saw GM’s stock price plunge 6% to $33.95, the market valued the world’s biggest automaker at just $19.21 billion.
That market capitalization is less than half a single quarter's sales.
Globally, G.M.’s automotive operations earned $122 million. Total revenue was a record $43.1 billion.
And people keep repeating the mantra "Japan is finished" or "economic stagnation" or even "debt crisis" or "shortage of workers"...take your pick from any of the above and blend in liberally into any NY Times or Time magazine article from the last 40 odd years (yes really).
Just because China has taken our eyes off Japan, that doesn't mean that Japan still isn't going places.
In the final analysis, all wealth is down to genetics.
The Japs certainly aren't going anywhere and are nowhere near finished. They are a highly organized, homogenous and intelligent nation despite their fondness for weird fads and tentacle porn. When I was over there during a military posting, I had some time to explore the nation. I found out that I liked the people and culture and that they have a pretty good sense of humor. Between my bad Japanese and their bad English, we got along fine. Even the homeless are organized, polite, unobtrusive and neat:
As for Japanese vs. US auto makers I remember reading that in the US there are many different classifications for union jobs. In Japan, there is only one, Production. Says quite a lot about what the union sees as important to their company as opposed to the UAW who is interested only in pissing contests.
One final thing. As I said I was over there for military reasons and sometimes got to work with my counterparts in the Japanese military. These guys are armed to the teeth with 1st rate equipment and their forces, from what I could tell are comprised of very good personnel. They are not ashamed one bit about WW2 and look at their achievements with pride from the battle of Tsushima to the last ditch defenses on Okinawa. It is too bad they didn't join us in Iraq, I would love to have them next to me. See here for their latest naval acquisition:
Of course buying GM would actually be a pretty dubious purchase, given that they carry something like $300 billion in debt and obligations. But if you could get past the antitrust issues, it might actually be a good idea - because with Toyota holding the debt, the interest could be reduced from whatever junk bond rates GM is currently forced to pay to something more reasonable, saving something like $8 billion a year...
Of course, the Japanese way of keeping ahead of China is to emphasise quality over quantity.Their whole approach as been to go for high added value.
Neo-Con dominated America on the other hand thinks that importing unlimited unskilled thir-world labor to grind down chia on price, is the way forward.