This website uses cookies to ensure you have the best experience. Learn more

Toyota Recall Financing Dilema Essay

1086 words - 5 pages

Toyota Recall Financing Dilemma

Edgardo Donovan
Touro University International
FIN 501
Dr. Herbert Weinraub
Module 5 ' Case Analysis
Monday, March 19, 2007

Toyota Recall Financing Dilemma

"Toyota Motor Corporation is a Japanese multinational corporation and the world's second largest automaker making automobiles, trucks, buses and robots and providing financial services. Based in Toyota, Aichi, Japan, the company boasted a total vehicle production of 9.018 million vehicles in 2006. It is also the world's eighth largest company with revenue of $179 billion as of 2006. Toyota is the world's most profitable automaker Toyota sells ...view middle of the document...

During the 1970’s their North American product line focused mainly on economy cars and pickup trucks. Today they are present in practically every key American automotive demographic with competing products. They also entered what was once the domain of the European luxury sedan manufacturers by introducing its line of luxury “Lexus” automobiles. Although American and European car manufacturers have improved their product reliability and they still have not managed to catch up with Toyota.

Japanese and European automobile manufacturers benefit from a higher degree of degree of intra-governmental cooperation than their American counterparts. Many of the worker benefits provided by US auto manufacturers are provided to European and Japanese auto workers by their respective governments. Furthermore, Japanese and European corporations are more heavily subsidized than in North America. This allows them to operate at a higher rate of return and gives them access to more expansion and contingency capital which in situation like the aforementioned Toyota recall can come in quite handy.

The costs of Japanese government subsidies to Toyota are passed onto Japanese and European citizens via higher income and sales taxes. This diminishes their purchasing power and negatively affects the size of their automobile markets. Despite some of its drawbacks, this system has given Toyota a significant competitive advantage abroad which it has been slowly building upon over the course of the past 50 years.

Although borrowing against future earnings is the most financially sound option available to solve the recall dilemma, Toyota can avail of other options. Toyota could repeal some if its sales incentive programs thereby raising the price on some of their automobiles in an attempt to generate cash in the short-term. This would have a negative effect on overall sales in the long term substantially reducing market-share.

"In the United States, Toyota Motor Corporation's stock is offered in the form of American Depositary Receipts (ADRs) on the New York Stock Exchange (NYSE). The ADRs are traded under the symbol TM on the NYSE and are based on Toyota shares traded in Japan. Each ADR represents two shares of Toyota common stock” (Toyota)

Toyota could increase its capitalization by selling some of its stock off of any of the international markets. The drawback of such a strategy would be reduced leveraged control over any of its international subdivisions. Toyota could also request, however unlikely, that the Japanese government...

Other Essays Like Toyota Recall Financing Dilema

Comparing The Moral Virtues Of Antony And Julian The Apostate

1103 words - 5 pages Roman emperor Julian the Apostate and Christian leader Antony both exhibited many qualities of character during their existence. Both of them led very distinctive lives although shared several ethical values. Book 25 of “The Later Roman Empire” and the book “Early Christian Lives” show concrete evidence of this. In the following essay, I will argue how both leaders’ lives were devoted to their religious beliefs and their mutual cardinal virtues

Living In A Cashless Society Essay

1637 words - 7 pages Money in a traditional sense no longer exists. Money is becoming much of a concept than a physical material, and most ordinary bitter have not see the reality of the switch. People today are using credit and debit cards on a regular basis and in everyday situations such as meal purchased at fast food, highway tolls, clothing, groceries, gas stations, etc. all of these means of systems could be regarded as a cashless society or world. The question

The French And Indian War: The "Real" First World War

1955 words - 8 pages The Seven Years War, or more commonly referred to as “The French and Indian War”, has been called the true First World War. In this book The French and Indian War: Deciding the Fate of North America, the author and historian Walter R. Borneman paints a detailed and elaborate picture that justifies the claim of it being the first true war of global proportions. If ever there truly was a climax to the never ending feud of the European powers

Is The Use Of Animals In Medical Research A Necessary Measure?

1513 words - 7 pages Throughout history, animals have been used in experiments to test product safety and obtain medical knowledge that benefits both humans and animals alike. Every year there are numerous medical breakthroughs, such as medications and surgical instruments, which are tested on animals to insure their safety before they are deemed acceptable for human use. Even though the results of the experiments saved millions of human lives, they are also

Education And The Evolving Job Market

2363 words - 10 pages The lives of students today are changing. They are preparing for lives and jobs that have never before existed. If teachers hope to have a significant and worthwhile impact on these quickly changing lives, they must change the way they think, prepare, and instruct our future generations. Children cannot afford to have teachers who remain stagnant in their methods and ideals. Students crave instructors that are willing to allow them to tap

Young And Relentless

1737 words - 7 pages There are numerous influences that can be responsible of teenager’s behaviors and attitude as they develop. One factor that is important to these behaviors is parental figures being over involved or uninvolved in their children’s lives. Many of these effects include illegal substance abuse, rising sexual activity, underage alcohol consumption, and tobacco use. Studies show parental participation plays a key role in the characteristics developed

The Natural Law Theory

1231 words - 5 pages Obeying by the natural law theory is the only true and moral way to live life; especially a life lived in God’s image. God’s presence is a guiding factor to obtaining a moral and virtuous life, which can only be obtained by following the natural law theory. God created a set of laws as a supreme guide for humans to live life, like any law these laws were created to ensure wellbeing for everyone. The laws he created are the civil law, the natural

Resolved: Presidential Signing Statements Threaten To Undermine The Rule Of Law And The Separation Of Powers

1811 words - 8 pages The subject of signing statements has created much debate among the houses of Congress, government officials, and the public alike. These signing statements fall under the categories of constitutional and legislative history signing statements. Constitutional signing statements are those in which the president deems certain provisions of the legislation as unconstitutional, therefore they should not be enforced (Bradley & Posner, 2006

Oppressive Systems Of Government In Egypt And Animal Farm

1529 words - 7 pages As in Egypt, Orwell demonstrates through his allegorical novel “Animal Farm” that leaders are able to establish and maintain power over a people, and in turn create an oppressive and corrupt government system. Orwell shows the significant difference in the education and levels of knowledge in the animals, and how the government takes advantage of this difference. The split between the levels of intelligence is portrayed in the first chapter when

The Pathway To Psychosis

1415 words - 6 pages “How all occasions do inform against me” is a line from act IIII, scene IIII of William Shakespeare’s Hamlet. This line, spoken by Hamlet, expresses his emotional state as he is currently overwhelmed by the death of his father, the king of Denmark, and the situation surrounding it. After Hamlet learns of his father’s death he finds out that his mother has married Claudius, Hamlet’s uncle. On top of all of that, Hamlet soon after

Rated “M” For “More Censorship Not Needed”

1241 words - 5 pages Since the moment video games became a commercial success there have been people who have pushed for unfair amounts of censorship to be placed upon the content of the games and its availability to children. These groups push for increased regulations on content but there is already an appointed group to handle this issue, the ESRB. Even though there has been an increase in mature content in the video game industry, increased censorship is not

Related Papers

Toyota Motors Essay

922 words - 4 pages , 2010, that changed due to the recall of more than a million of their vehicles. The recalls were due to accelerator pedal sticking to the floor resulting in accidents. As of February 2010, Toyota is facing over 30 law suites regarding the accelerator problem. In addition to the recall of 8 million vehicles worldwide, according to Phil LeBeau, a CNBC Correspondent, the Feds slapped a $16,375 million dollar fine on Toyota for dragging its feet

Risk Management Essay

1094 words - 5 pages such as safety, environmental issues. Over the years Toyota has had to recall some models of its cars. This has affected its brand image and position. Also some government enforce trade barriers and price controls.Risk Prevention: Toyota has improved on safety issues and recalled faulty cars to meet global safety regulations. There has also been an effort to reposition the Toyota brand through marketing techniques.East Japan Railway Company is a

The Separation Of Capital Ownership And Control

1577 words - 7 pages The argument of whether the separation of capital ownership and control is an efficient form of organization has constantly been a controversial issue. The criticism whether the controllers’ act is in the best interest of the owners’ wills never end as long as hired managers operate management. As the number of public companies has been increasing over the course of this century, meanwhile the American style of contact based corporation has

The Versatility And Flexibility Of Oled's

1014 words - 5 pages In April 1, 2002, organic light emitting diodes gain rise in the scientific community with their published, more practical form at Ames Laboratory. “Scientists at the U.S. Department of Energy's Ames Laboratory, in collaboration with scientists at the University of Michigan, Ann Arbor, have developed and demonstrated a novel, fluorescence-based chemical sensor that is more compact, versatile and less expensive than existing technology of its