Page 54 - Toyota Under Fire

TWO

The Oil Crisis and the

Great Recession

It’s up to us, in management, to create an environment
in which every team member on the line takes control of
quality, and works to streamline production without ever
worrying about his own job security.
—The Toyota Way 2001

As 2008 began, it truly looked as
if it was going to be Toyota’s year. Toyota’s passenger cars, large
SUVs, and trucks were selling in record numbers. In America,
Toyota’s most profitable market, new plants were about to come
on line, increasing capacity (and improving Toyota’s margins and
reducing currency valuation risk, since fewer vehicles would need
to be shipped from Japan to meet demand).
But by the spring, oil prices began rising dramatically. And
they didn’t stop. The United States, with its love of large vehicles
and its low gas prices from a global perspective, was particularly
hard hit. By the summer of 2008, gasoline prices in the United
States had almost doubled, topping the prices during the worst of
the 1970s oil crises on an inflation-adjusted basis. In most of the
country, regular gasoline was going for more than $4 a gallon; in
states like California and New York, it was over $5. That meant

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