The latest developments in the automotive industry continue to be disastrous. As most are now aware, American auto makers will receive a bailout, even though Congress was unable to reach an agreement on the matter.
However, it is not just American automakers that are dealing with the fallout of collapsing worldwide demand. U.S. sales data for the auto industry were released Tuesday with cumulative sales plunging 36% in December.
The results were abysmal across the board: General Motors (GM - Get Report) down 31%, Ford (F - Get Report) down 32%, Honda (HMC - Get Report) down 35% and Toyota (TM - Get Report) off 37%. These figures are compared to sales from a year ago, and in that time, the deterioration in both consumer spending and confidence has been drastic.For the entire year, Toyota's sales slumped 16%. Now, Toyota is expecting its first operating loss in its 70-year history. This is certainly not an easy operating environment for automakers, including the world's largest. As Toyota's newly resigned President Katsuaki Watanabe said, "It's a kind of emergency that we've never experienced before. The environment surrounding us is extremely harsh." In response to weakening demand in Toyota's hugely important U.S. market, as well as other markets such as Asia, the company is being forced to tighten its belt. Today, TM came forward with a plan to shut down production for 11 days in February and March for all of its factories in Japan. This is in addition to the three-day suspension of operations in January already announced.