Toyota’s per-car profits lap Detroit’s Big three automakers

Despite the boom in the U.S. automotive industry, Toyota Motor Corp. earns more in a year than Detroit’s Big Three automakers combined.

That doesn’t tell the utter story: When average earnings per vehicle are calculated, the Japanese automaker makes more than four times per car than General Motors Co.

Detroit auto companies are arguably the healthiest they’ve been in decades. GM, Ford Motor Co. and Fiat Chrysler Automobiles NV are profitable, adding jobs and creating the most advanced cars in history.

But they trail Toyota significantly in overall financial spectacle. Even however they all reported strong two thousand fourteen earnings — $6.Five billion for GM, $6.Three billion for Ford, $Three.9 billion for Fiat Chrysler before interest and taxes — Toyota this month raised its outlook to Two.92 trillion yen (about $24.Five billion) for the fiscal year ending March 31.

Then there’s average earnings per vehicle: Toyota is expected to come in at $Two,726 for its current fiscal year. Ford ($994), Fiat Chrysler ($850) and GM ($654) were all below $1,000 for the two thousand fourteen calendar year.

Currency, labor rates and legacy costs are all factors in the gap inbetween Detroit automakers and Toyota, according to analysts and industry experts.

“There’s lots of moving parts to profitability,” said IHS Automotive analyst Michael Robinet. “There’s investment elements, cost elements and revenue elements — and currency issues can certainly mask improvements but can also mask deficits.”

Weakening foreign currency is a hot button issue for the industry — primarily because of the weakening of the Japanese yen, and possible currency manipulation.

A feeble yen cheapens the price of Japan’s exports, making Japanese cars cheaper to buy in the United States.

Some automakers, including Ford, have criticized regulators for not cracking down on alleged currency manipulation. Ford President of the Americas Joe Hinrichs last year called currency manipulation the “major trade barrier of the 21st century.”

Citing investment rigid Morgan Stanley, Hinrichs said weakening of the yen puts toughly $Two,000 per export vehicle in the pockets of Japan’s three largest automakers — Toyota, Nissan and Honda.

Rep. Debbie Dingell, D-Dearborn, last month pegged that differential even higher: Dingell, a former auto executive, said currency manipulation has helped create a “subsidy” to Japanese automakers that she said now tops $8,000 per vehicle.

Japan has denied manipulating its rates.

Financial analysts report that Toyota’s large increase in earnings is almost entirely due to a currency benefit from the feeble yen.

“We believe the weakened yen will help yen-denominated profits to rise quicker and enhance Toyota’s competitiveness vs. American brands,” said S&P Capital IQ equity analyst Efraim Levy in a note to investors this month.

Because of the weaker yen, Honda’s third-quarter revenue enhanced 8.9 percent year over year. Without that benefit, Morningstar, an investment research and investment management hard headquartered in Chicago, reports revenue would have fallen 0.Five percent against other major currencies, primarily the U.S. dollar. “A weaker yen against the dollar than in latest years and recovering U.S. request for light vehicles make the future bright for Honda,” Morningstar equity analyst David Whiston wrote in a latest note to investors.

A powerless yen benefits Toyota far more than its Japanese counterparts because it exports a greater proportion of its cars: Morningstar estimates that in 2014, Toyota exported 45.Three percent of the more than Trio.Five million cars it produced in Japan. By comparison, Honda exported about three percent of its cars.

Labor costs for Detroit automakers have traditionally far exceeded those of foreign automakers that produce cars and trucks in the U.S.

In latest years, labor costs have been more manageable for Detroit automakers, thanks to nimble contracts with the United Auto Workers that include two-tier wage systems and profit-sharing payments instead of stationary raises. Morningstar says GM’s U.S. hourly worker labor cost is about $Five billion compared with about $16 billion in two thousand five under the old pre-bankrupt GM.

“(GM) no longer has to overproduce in an attempt to cover high labor costs and then dump cars into rental fleets,” which hurts residual values, Whiston said.

The Center for Automotive Research in Ann Arbor reports that two thousand fourteen labor costs at GM and Ford were higher than foreign automakers such as Toyota and Honda. Fiat Chrysler labor costs were lower than its domestic counterparts as well as Toyota and Honda because of the number of entry-level workers under the two-tier pay structure.

The two-tier wage structure, introduced in 2007, helped salvage the U.S. auto industry and permitted the Detroit automakers to invest billions into U.S. plants and add thousands of employees. But those entry-level workers make substantially less than top-tier employees, who earn about $27 an hour. Under the current contract, newer workers make at least $Nineteen.28 an hour, up from about $15.50 in 2011.

As of December 2014, about 17.Five percent of GM’s hourly workforce was entry-level; approximately twenty three percent at Ford and about forty four percent at Chrysler.

Detroit automakers proceed to bear billions of dollars in legacy costs such as pension and benefit packages for retirees and current employees. In 2014, Detroit’s Big Three contributed more than $Three billion to employee and retiree pension and health care obligations.

Each of the Detroit automakers has managed to shed millions of dollars by suggesting pension buyouts to salaried retirees and switching current salaried retirees away from defined, traditional pensions to 401(k) benefits.

“Auto companies want to concentrate their resources on making and selling cars, not managing money,” said Dean Thurman, co-founder and senior playmate of Bloomfield Hills-based InvestWise Financial LLC. “There are enough risks and unknowns manufacturing automobiles that it is not in their best interest to also be vulnerable to risks associated with managing billions in pension funds.”

The next step, according to analysts, will be to suggest pension buyouts to hourly retirees and 401(k) plans to fresh hires — proposals that likely will come up when the UAW and automakers sit down for contract negotiations later this year.

Toyota s per-car profits lap Detroit s Big three automakers

Toyota’s per-car profits lap Detroit’s Big three automakers

Despite the boom in the U.S. automotive industry, Toyota Motor Corp. earns more in a year than Detroit’s Big Three automakers combined.

That doesn’t tell the total story: When average earnings per vehicle are calculated, the Japanese automaker makes more than four times per car than General Motors Co.

Detroit auto companies are arguably the healthiest they’ve been in decades. GM, Ford Motor Co. and Fiat Chrysler Automobiles NV are profitable, adding jobs and creating the most advanced cars in history.

But they trail Toyota significantly in overall financial spectacle. Even however they all reported strong two thousand fourteen earnings — $6.Five billion for GM, $6.Three billion for Ford, $Trio.9 billion for Fiat Chrysler before interest and taxes — Toyota this month raised its outlook to Two.92 trillion yen (about $24.Five billion) for the fiscal year ending March 31.

Then there’s average earnings per vehicle: Toyota is expected to come in at $Two,726 for its current fiscal year. Ford ($994), Fiat Chrysler ($850) and GM ($654) were all below $1,000 for the two thousand fourteen calendar year.

Currency, labor rates and legacy costs are all factors in the gap inbetween Detroit automakers and Toyota, according to analysts and industry experts.

“There’s lots of moving parts to profitability,” said IHS Automotive analyst Michael Robinet. “There’s investment elements, cost elements and revenue elements — and currency issues can certainly mask improvements but can also mask deficits.”

Weakening foreign currency is a hot button issue for the industry — primarily because of the weakening of the Japanese yen, and possible currency manipulation.

A feeble yen cheapens the price of Japan’s exports, making Japanese cars cheaper to buy in the United States.

Some automakers, including Ford, have criticized regulators for not cracking down on alleged currency manipulation. Ford President of the Americas Joe Hinrichs last year called currency manipulation the “major trade barrier of the 21st century.”

Citing investment rock hard Morgan Stanley, Hinrichs said weakening of the yen puts toughly $Two,000 per export vehicle in the pockets of Japan’s three largest automakers — Toyota, Nissan and Honda.

Rep. Debbie Dingell, D-Dearborn, last month pegged that differential even higher: Dingell, a former auto executive, said currency manipulation has helped create a “subsidy” to Japanese automakers that she said now tops $8,000 per vehicle.

Japan has denied manipulating its rates.

Financial analysts report that Toyota’s large increase in earnings is almost entirely due to a currency benefit from the feeble yen.

“We believe the weakened yen will help yen-denominated profits to rise quicker and enhance Toyota’s competitiveness vs. American brands,” said S&P Capital IQ equity analyst Efraim Levy in a note to investors this month.

Because of the weaker yen, Honda’s third-quarter revenue enhanced 8.9 percent year over year. Without that benefit, Morningstar, an investment research and investment management rock-hard headquartered in Chicago, reports revenue would have fallen 0.Five percent against other major currencies, primarily the U.S. dollar. “A weaker yen against the dollar than in latest years and recovering U.S. request for light vehicles make the future bright for Honda,” Morningstar equity analyst David Whiston wrote in a latest note to investors.

A powerless yen benefits Toyota far more than its Japanese counterparts because it exports a greater proportion of its cars: Morningstar estimates that in 2014, Toyota exported 45.Trio percent of the more than Trio.Five million cars it produced in Japan. By comparison, Honda exported about three percent of its cars.

Labor costs for Detroit automakers have traditionally far exceeded those of foreign automakers that produce cars and trucks in the U.S.

In latest years, labor costs have been more manageable for Detroit automakers, thanks to pliable contracts with the United Auto Workers that include two-tier wage systems and profit-sharing payments instead of motionless raises. Morningstar says GM’s U.S. hourly worker labor cost is about $Five billion compared with about $16 billion in two thousand five under the old pre-bankrupt GM.

“(GM) no longer has to overproduce in an attempt to cover high labor costs and then dump cars into rental fleets,” which hurts residual values, Whiston said.

The Center for Automotive Research in Ann Arbor reports that two thousand fourteen labor costs at GM and Ford were higher than foreign automakers such as Toyota and Honda. Fiat Chrysler labor costs were lower than its domestic counterparts as well as Toyota and Honda because of the number of entry-level workers under the two-tier pay structure.

The two-tier wage structure, introduced in 2007, helped salvage the U.S. auto industry and permitted the Detroit automakers to invest billions into U.S. plants and add thousands of employees. But those entry-level workers make substantially less than top-tier employees, who earn about $27 an hour. Under the current contract, newer workers make at least $Nineteen.28 an hour, up from about $15.50 in 2011.

As of December 2014, about 17.Five percent of GM’s hourly workforce was entry-level; approximately twenty three percent at Ford and about forty four percent at Chrysler.

Detroit automakers proceed to bear billions of dollars in legacy costs such as pension and benefit packages for retirees and current employees. In 2014, Detroit’s Big Three contributed more than $Trio billion to employee and retiree pension and health care obligations.

Each of the Detroit automakers has managed to shed millions of dollars by suggesting pension buyouts to salaried retirees and switching current salaried retirees away from defined, traditional pensions to 401(k) benefits.

“Auto companies want to concentrate their resources on making and selling cars, not managing money,” said Dean Thurman, co-founder and senior fucking partner of Bloomfield Hills-based InvestWise Financial LLC. “There are enough risks and unknowns manufacturing automobiles that it is not in their best interest to also be vulnerable to risks associated with managing billions in pension funds.”

The next step, according to analysts, will be to suggest pension buyouts to hourly retirees and 401(k) plans to fresh hires — proposals that likely will come up when the UAW and automakers sit down for contract negotiations later this year.

Toyota s per-car profits lap Detroit s Big three automakers

Toyota’s per-car profits lap Detroit’s Big three automakers

Despite the boom in the U.S. automotive industry, Toyota Motor Corp. earns more in a year than Detroit’s Big Three automakers combined.

That doesn’t tell the total story: When average earnings per vehicle are calculated, the Japanese automaker makes more than four times per car than General Motors Co.

Detroit auto companies are arguably the healthiest they’ve been in decades. GM, Ford Motor Co. and Fiat Chrysler Automobiles NV are profitable, adding jobs and creating the most advanced cars in history.

But they trail Toyota significantly in overall financial spectacle. Even however they all reported strong two thousand fourteen earnings — $6.Five billion for GM, $6.Trio billion for Ford, $Three.9 billion for Fiat Chrysler before interest and taxes — Toyota this month raised its outlook to Two.92 trillion yen (about $24.Five billion) for the fiscal year ending March 31.

Then there’s average earnings per vehicle: Toyota is expected to come in at $Two,726 for its current fiscal year. Ford ($994), Fiat Chrysler ($850) and GM ($654) were all below $1,000 for the two thousand fourteen calendar year.

Currency, labor rates and legacy costs are all factors in the gap inbetween Detroit automakers and Toyota, according to analysts and industry experts.

“There’s lots of moving parts to profitability,” said IHS Automotive analyst Michael Robinet. “There’s investment elements, cost elements and revenue elements — and currency issues can certainly mask improvements but can also mask deficits.”

Weakening foreign currency is a hot button issue for the industry — primarily because of the weakening of the Japanese yen, and possible currency manipulation.

A powerless yen cheapens the price of Japan’s exports, making Japanese cars cheaper to buy in the United States.

Some automakers, including Ford, have criticized regulators for not cracking down on alleged currency manipulation. Ford President of the Americas Joe Hinrichs last year called currency manipulation the “major trade barrier of the 21st century.”

Citing investment rigid Morgan Stanley, Hinrichs said weakening of the yen puts toughly $Two,000 per export vehicle in the pockets of Japan’s three largest automakers — Toyota, Nissan and Honda.

Rep. Debbie Dingell, D-Dearborn, last month pegged that differential even higher: Dingell, a former auto executive, said currency manipulation has helped create a “subsidy” to Japanese automakers that she said now tops $8,000 per vehicle.

Japan has denied manipulating its rates.

Financial analysts report that Toyota’s large increase in earnings is almost entirely due to a currency benefit from the powerless yen.

“We believe the weakened yen will help yen-denominated profits to rise swifter and enhance Toyota’s competitiveness vs. American brands,” said S&P Capital IQ equity analyst Efraim Levy in a note to investors this month.

Because of the weaker yen, Honda’s third-quarter revenue enlargened 8.9 percent year over year. Without that benefit, Morningstar, an investment research and investment management rock-hard headquartered in Chicago, reports revenue would have fallen 0.Five percent against other major currencies, primarily the U.S. dollar. “A weaker yen against the dollar than in latest years and recovering U.S. request for light vehicles make the future bright for Honda,” Morningstar equity analyst David Whiston wrote in a latest note to investors.

A feeble yen benefits Toyota far more than its Japanese counterparts because it exports a greater proportion of its cars: Morningstar estimates that in 2014, Toyota exported 45.Trio percent of the more than Trio.Five million cars it produced in Japan. By comparison, Honda exported about three percent of its cars.

Labor costs for Detroit automakers have traditionally far exceeded those of foreign automakers that produce cars and trucks in the U.S.

In latest years, labor costs have been more manageable for Detroit automakers, thanks to lithe contracts with the United Auto Workers that include two-tier wage systems and profit-sharing payments instead of immobile raises. Morningstar says GM’s U.S. hourly worker labor cost is about $Five billion compared with about $16 billion in two thousand five under the old pre-bankrupt GM.

“(GM) no longer has to overproduce in an attempt to cover high labor costs and then dump cars into rental fleets,” which hurts residual values, Whiston said.

The Center for Automotive Research in Ann Arbor reports that two thousand fourteen labor costs at GM and Ford were higher than foreign automakers such as Toyota and Honda. Fiat Chrysler labor costs were lower than its domestic counterparts as well as Toyota and Honda because of the number of entry-level workers under the two-tier pay structure.

The two-tier wage structure, introduced in 2007, helped salvage the U.S. auto industry and permitted the Detroit automakers to invest billions into U.S. plants and add thousands of employees. But those entry-level workers make substantially less than top-tier employees, who earn about $27 an hour. Under the current contract, newer workers make at least $Nineteen.28 an hour, up from about $15.50 in 2011.

As of December 2014, about 17.Five percent of GM’s hourly workforce was entry-level; approximately twenty three percent at Ford and about forty four percent at Chrysler.

Detroit automakers proceed to bear billions of dollars in legacy costs such as pension and benefit packages for retirees and current employees. In 2014, Detroit’s Big Three contributed more than $Trio billion to employee and retiree pension and health care obligations.

Each of the Detroit automakers has managed to shed millions of dollars by suggesting pension buyouts to salaried retirees and switching current salaried retirees away from defined, traditional pensions to 401(k) benefits.

“Auto companies want to concentrate their resources on making and selling cars, not managing money,” said Dean Thurman, co-founder and senior playmate of Bloomfield Hills-based InvestWise Financial LLC. “There are enough risks and unknowns manufacturing automobiles that it is not in their best interest to also be vulnerable to risks associated with managing billions in pension funds.”

The next step, according to analysts, will be to suggest pension buyouts to hourly retirees and 401(k) plans to fresh hires — proposals that likely will come up when the UAW and automakers sit down for contract negotiations later this year.

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