A Modest Proposal for Saving Toyota

Okay, now I think the U.S. auto industry might have finally hit rock bottom. As is being widely reported, Yoshimi Inaba — president and COO of Toyota Motor America as well as chairman and CEO of Toyota Motor Sales USA — has admitted in a meeting with reporters that the largest automaker in the world is no longer profitable in North America.

Frankly, it's no surprise. Just in case it has slipped under someone's radar screen, Toyota's sales declines in recent months actually have outpaced the industry's numbers — in a bad way: Through the first six months of 2009, Toyota sales have fallen 38 percent; overall industry sales in the U.S. are down "only" 35 percent.

Part of the problem has to do with products. Oddly, my invite to that chat with Inaba must have been lost in the mail, but according to the Detroit News, "[he] acknowledged that Toyota vehicles had often lacked 'passion' and that the company's vehicles must be 'more exciting, more nimble.'"

Further, like the other full-line OEMs, Toyota was unable to resist the lure of the big profits that used to found in big trucks. It would take an awful lot of Prius sales to recoup all the money the company put into the upgrading of its latest Tundra full-size pickup.

The company's U.S. manufacturing footprint also is in disarray. Toyota started building a new plant in Mississippi a few years ago to meet anticipated demand for its Toyota Highlander SUV. Then the price of fuel spiked, so plans were made to switch to production of the Prius. Then the price of fuel fell and the market completely collapsed. Although the plant was finally finished earlier this year, Toyota still hasn't put any actual manufacturing equipment in it, and it remains an empty shell.

This is on top of the NUMMI situation. GM, as you may recall, has pulled out of the former GM-Toyota joint venture, which most recently produced the Pontiac Vibe (R.I.P.) and the Toyota Matrix (pictured), and it appears as if this was no sort of negotiating tactic. The plant is now Toyota's sole problem, with the company left to decide whether to continue with the expensive proposition of running the plant alone or face a PR debacle over closing it. Because the latter would mean cutting a chunk of jobs in a California, which also happens to be Toyota's top U.S. market. That would certainly be a nice-sized firestorm of controversy over job losses in California, the company's top U.S. market.

Now, I could go on and on about Toyota's problems, because they do go on and on. But instead, I'm going to get all Jonathan Swift here and say the real crux of Toyota's troubles is that they don't have enough dealers in this country.

After all, I've been hearing a lot about how the GM/Chrysler dealer cut is actually bad for those companies' business. Surely that means that if Toyota — which still fields about half the number of dealers that the post-cull GM does — only added more, business would improve, right?