Page 91 - Toyota Under Fire

TOYOT A UNDER FIRE

the United States, Europe, and Japan. In August 2009, Toyota
sold more vehicles under the United States’ Cash for Clunkers
program than any other manufacturer, holding five of the top ten
slots for vehicles sold. In fact, sales were so high that Toyota had a
different problem: it could not build cars fast enough. All plants
in North America were working overtime, but dealer inventory
of the most popular cars—mostly smaller, fuel-efficient cars—
was almost sold out. In August, sales were up to about 195,000
vehicles. But the volatility was not over. After Cash for Clunk-
ers ended, sales dropped precipitously in September to 98,000,
although this was partially a result of having limited inventory
available for sale.
In October, Toyota was able to announce that it had returned
to profitability, still without laying off any workers. Toyota’s suc-
cess was a testament to both the strong brand equity that it had
built over decades and a policy of miserly spending and saving
when times were good. With about $25 billion in cash or cash
equivalents, the company could afford to wait out the recession
without slashing R&D, closing plants, or laying off large num-
bers of employees. It certainly looked as if Toyota had pulled off
one of the all-time great corporate turnarounds, all the while es-
chewing any thought of abandoning its core principles or mak-
ing major changes to its strategy. In fact, it’s probably accurate to
say that Toyota weathered the Great Recession by simply doing
more of what it had been doing before the recession—living the
Toyota Way.
In August 2009, Toyota looked as if it were back on its tra-
jectory toward becoming the largest and most admired company
in the world. Then a tragic accident in San Diego changed every-
thing.

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