[Corey]

Originally Posted by dsgerbc

If you keep quoting management that tries to spin its poor profits in a way that makes it appear less of a management failure I see little point debating.

The real reason here is management failure. Just for the sake of illustration: suppose in 2007 you have a 5 year deal with some financial sector firm to swap your dollar revenue for yen at a rate of 95 yen/dollar. So now you're in 2010 for example, exchange rate is ~80 and it looks like there's zero chance of renewing your swap arrangement at the same rate when it's up in two years, but you have that time. Prudent management would start preparing: cut costs, relocate R&D personnel (to U.S. for example), find alternative suppliers for large and expensive parts (say China/Korea/U.S.) etc. Sure, cutting domestic wages is hard, but wage bill (attributed domestically, thus not declining with the strengthening yen) is only 10-15% of the cost of the car, so it's not too big of a problem. Not so prudent management: "hey, this exchange rate movement is temporary (safe heaven effect, crisis in Europe etc, whatever), let's wait it out". So in essence they make a directional bet on exchange rates. Which is always risky as hell. It makes short-term profit look good but costs arm and leg in the long run. This I would attribute to bad management, not exchange rate movement.
There's also a chance that they didn't have their dollar revenue adequately hedged, for whatever reason. That would also be a management failure.

So now you're telling me that Japan's economic crisis is a conspiracy perpetuated by Toyota's management, and that you know more about financial management than Japan's entire export industry. Cute.

By the way

This year’s albatross for Toyota involves the soaring value of the yen, a man-made disaster over which Toyota has no control. Thanks to weak economies outside of Japan, the yen has been gaining value against the dollar, the Euro and other important currencies, as seen here in the dollar’s plunging value against the yen.

http://ycharts.com/analysis/story/bu...distant_memory

At least do a little bit of research before you begin spouting drivel.