Toyota forecasts first operating loss as sales slump

Automotive News

NAGOYA, Japan (Reuters) -- Toyota Motor Corp. forecast a first-ever annual operating loss, blaming a relentless sales slide and a crippling rise in the yen while declaring an emergency unprecedented in its 70-year history.

The world's biggest automaker had been expected to issue its second profit warning in less than seven weeks after domestic rival Honda Motor Co. also cut its outlook again last week, but today's downward revision was bigger than analysts predicted.

"We are facing an unprecedented emergency," President Katsuaki Watanabe told a year-end news conference today. "This is a crisis unlike the crises of the past."

The forecast compounds the global automotive crisis and comes three days after General Motors and Chrysler LLC staved off bankruptcy through a U.S. pledge for $17.4 billion in emergency loans. Automakers around the world are caught in a sharp reversal of demand as the financial crisis spreads, squeezing credit and consumer sentiment.

Toyota cut its group operating forecast to a loss of 150 billion yen ($1.7 billion) for the year ending March 31, after shocking financial markets last month by slashing its group operating profit forecast by 1 trillion yen to 600 billion yen.

It made a record profit of 2.27 trillion yen last year....More

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UAW says working to prevent "run" on GM, Chrysler

By David Bailey

DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger on Friday blamed Senate Republicans for the collapse of the auto bailout bill and said the union was ready to do its part to prevent creditors from forcing General Motors Corp or Chrysler LLC into bankruptcy.

"We're going to work tirelessly to make this happen and realize that there's going to have to be restructuring," Gettelfinger told reporters.

Gettelfinger said the key now is to prevent suppliers from stopping shipments to GM or Chrysler or demanding payment in cash up front -- a situation he likened to "a run on the bank."

"We need to satisfy the suppliers that there is going to be a tomorrow," he said.

Without immediate federal help now by the White House through the $700-billion fund for the banking system, GM will not be able to make it out of December, and Chrysler's own dire cash position is similar, he said.

"If we worked for nothing, it wouldn't help them limp into January," Gettelfinger said.

Senate negotiations over a $14 billion package to extend emergency loans to the auto industry broke down late Thursday. That came after the UAW balked at requirements from Senate Republicans that would have forced the union to agree to sweeping concessions on the spot.

"We wondered, quite frankly, if we were just being set up," Gettelfinger said.

The UAW has been a stalwart ally of the Democratic party and worked hard for the election of President-elect Barack Obama.

Gettelfinger said some Republicans, particularly from southern states like Alabama, saw the bailout negotiations as a way to cripple the union while aiding the Japanese, South Korean and German automakers that have located plants and supply operations in their home districts.

"They thought perhaps they could have a twofer here maybe -- pierce the heart of organized labor while representing the foreign brands," he said....More

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