09 May 2007

Toyota, GM, and the seeds of future growth

Toyota's annual report, released today, revealed robust growth in 2006. According to some, Toyota's CEO Wantanbe downplayed record breaking profits in order avoid inviting "jealousy and other negative reactions" including trade sanctions.

Meanwhile GM and Ford are losing billions. At Ford even the Ford family is considering hiring outside advisers for the struggling company.

While Toyota is "'planting the seeds' of future growth" the recent film "Who Killed the Electric Car" indicates that GM is intentionally crushing them and burying them in the desert.

Toyota Profit Robust, Forecast Cautious - New York Times
Yet, despite last year’s strong showing, Toyota struck a cautious note in its forecast for the current fiscal year, which ends in March 2008. The company said it expects a modest 0.4 percent rise in net profit, to 1.65 trillion yen ($14.1 billion).

The company attributed the forecast to what it called a “severe market” in slumping North America, where Toyota earns about 60 percent of its profits. Toyota said it expects sales growth this year in North America to slow to 1.6 percent, down from 15.1 percent last year. Toyota also cited increased spending to build factories and develop new vehicles and technologies, like its popular gas-electric hybrids and more futuristic hydrogen-powered fuel-cell engines.

The slowdown in profit growth “is temporary, as we are planting the seeds” of future growth, Toyota’s president, Katsuaki Watanabe, told reporters. “Earnings will improve again.”

Who Killed the Electric Car? Trailer:

An Electric Car, Booted - Washington Post
The film [Who Killed the Electric Car?] chronicles how GM developed and launched a fleet of silent, aerodynamic electric vehicles to meet California's zero-emissions mandate. The shapely two-seaters with a GM logo enjoyed a brief ride in California and Arizona from 1996 until 2003, when they were taken off the market and destroyed. (GM says it was concerned about safety; others say the company wanted to head off the loss of proprietary secrets.)

[Chris] Paine was one of the original drivers. The director started to make a comedy about Los Angeles drivers going nutty over cars, but the project turned serious after he encountered perfectly drivable EV1s being crushed and shredded at the Mesa Proving Grounds in Arizona.

In the film, images of President Bush and Vice President Cheney set a political tone, although California regulators set standards for zero emissions that forced automakers, including Honda and Toyota, to experiment with electric cars. Ralph Nader weighs in. So do Mel Gibson and Tom Hanks, who drove EV1s.

Every one of its 2,000 parts was unique. The engine whirred, rather than roared, but spewed no emissions; there was no gear-shifting; and drivers talk of the car's torque with awe.

The film presents the EV1 as an answer to global warming, pollution, unrest in the Middle East and rising gasoline prices.

Instead, California changed its emissions laws and automakers could again pursue nonelectric technology…

Phil Karn, a vice president for technology at Qualcomm in San Diego, drove the Smithsonian's car for two years. He leased a second one, commuting 11 miles each way to work without recharging issues. When the car was reclaimed, he says, it felt like losing a family pet.

"It made no sense to us," he said by phone. "The only way we can figure is, they built this car to fail . . . or the anti-EV1 faction inside GM won."

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