Thursday, January 28, 2010


BANZAI7 NEWS--Three or four years ago senior Honda executives demanded to know from their underlings how arch-rival Toyota could expand its production and sales so quickly and still keep its quality intact.

Now they're getting the answer: Toyota's once-vaunted quality actually was eroding. This week the company suspended the sale of eight different models, including the popular Corolla, Camry and Avalon, for potential safety problems. Next week Toyota will halt production at the five North American factories that make those vehicles.

The company also expanded a recall that already was the largest in automotive history. Some 4.8 million Toyota cars and trucks might suffer from sticking accelerator pedals or faulty floor mats that seem to grab the accelerator (some have been recalled for both reasons) and can cause the car to accelerate out of control. Several deaths have been attributed to the problem.

How could this possibly happen to the car company that was the undisputed leader in quality, the company that all the others from Germany and America and even Japan wanted to emulate? The answer is almost too simple.

Just like Citigroup, Toyota is suffering from trying to get too big, too fast.

Just like Citigroup, in the early years of this century the company sensed weakness among its rivals in the American market, and also opportunity in China and other emerging markets outside the U.S. So it began a headlong expansion spree around the world.

Just like Citigroup, it wound up manufacturing and selling shoddy products. However, unlike Citigroup, Toyota is not too big to fail. Moreover, unlike Toyota, Citigroup is not required to recall its defective financial products and its has not suspended trading.

Meanwhile, 2big2fail GM, sees an opportunity 2big2let go buy...

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