General Motors had about $11 billion in cash on hand when it admitted in November that bankruptcy might be near for the automaker without federal intervention. Now, reports are emerging the only automaker larger may not be much better off today.
Autoline Detroit reports, "In its most recent financial report, Toyota states that it has ¥1.8 trillion in cash, which is roughly $18.5 billion, or about the same level of cash Ford reported in its most recent financial statement." The company is probably not in imminent danger of collapse. It "has a solid balance sheet," but "it's not as solid as it used to be. Moreover, the company is projecting it will lose money in the current fiscal year, something that has never happened before in its history."
Autoblog notes, "The company has spent heavily on new factories and new products in the U.S. in recent years," borrowing heavily in the process, "But saw its sales plummet as much as the domestics in the second half of 2008. Its total current short-term liabilities are now roughly equal to its total current assets, and its cash reserves put the company on par with Ford. In recent months, Toyota has been moving aggressively to cut costs and budgets have been slashed company wide. The automaker famous for avoiding layoffs was also reportedly considering shedding some jobs in the U.S. and UK, but had denied those reports are true."
The news doesn't mean that Toyota will be asking Japan for a bailout soon, but Autoline comments, "It's surprising to see how close the company has come to the edge of the cliff."
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