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TOYOTA RECALL BODES WELL FOR DOMESTICS

Updated on February 17, 2010
Toyota emblem
Toyota emblem

It's not just GM and Chrysler having problems. Now you can add Toyota to that list as well, as it was recently released that they will be suspending not only production of new cars, but sales as well for at least eight of their models, which will include the popular Camry and Corolla. This adds up to about 57% of all of Toyota's production and sales, and that's no small cookies to say the least. If I were an investor of this company I'd be shaking in my boots.

The problem seems to be a gas pedal that the company believes is wearing out, causing it not to spring back once it's depressed and causing unintended acceleration. They did recall approximately 2.3 million vehicles before deciding to suspend production altogether, but here's the real kicker.

Toyota does not have a solution to the problem. They can't fix it.

True, that's only for now. But who knows how long it will take to find a fix? Who knows if they're even sure what the problem is? It seems apparent that they really don't know at this point. That's pretty scary stuff not just for someone who's been stuffing a lot of money into the company's stock, it's a scary thing if you are driving around in a faulty Toyota right now as well.

Which brings me back to Ford Motor Company. I've been touting this company for some time in my blogs, and I recently wrote about it here on HubPages in my hub, "Ford Motor Company: An American Gem." If GM and Chrysler and Toyota are all having problems with credibility, then who do you have left to turn to? Sure, there are still quite a few other car makers out there besides Ford. There's Volkswagen, Nissan, Kia, Hyundai, and even Honda.

Still, there's a clear "buy American" sentiment brewing in this country, and while globalization does make it nearly impossible to know exactly what you're buying and where it actually came from, the statistics still tell the whole story overall. Most foreign made cars have at least some of their parts made in the USA, that's true, so you're not totally turning your back on the American job. And if you want to know just how much of the car you're buying is made in the USA, just take a look at the sticker on the window. It's right on there along with how many miles per gallon the car gets and how much each accessory is going to cost you—that's been the law since 1994. The truth is, most people either don't look at it, or don't even know the information is there for them to see.

The point is, that even while you can't rely on a domestic nameplate to know you're truly getting a domestic car, the fact is that all domestic cars have more parts made in the USA than any of their foreign counterparts. Buying American is still essentially buying American, even if some of those cars are, in fact, made in Mexico, for example.

According to the Automobile Policy Trade Council, which I should note is funded by the Big Three automakers, all American brand cars are about 73% US made—that's an industry wide mean figure to include parts, manufacturing, everything. When you compare that to Toyota, they are about 48% made in the USA. Nissan is about 46-47%. Honda fares the best with about 59% made in the USA parts and production.

I'm not saying I'm happy about Toyota's recent woes. Nor am I happy about the problems being suffered by GM or Chrysler. In situations like this there is always someone on the other end getting the short end of the stick. Still, in the real word there are also winners and losers. The clear winner in this case is Ford.

I said it in my hub, "Ford Motor Company: An American Gem," "Look out Toyota. Ford is not comprised of dummies, and let's not forget that they practically invented the business of making automobiles. There has been vast improvement across all American auto brands, and I'm inclined to believe that it will only get better. Ford will be the leader of the pack."

This opens up a window of opportunity for Ford Motor Company. They are the ones who have every chance right now to restore faith in an American nameplate, and I think they are. Toyota is not out of the game by any means. But this will hurt them. It will also hurt their reputation. How much depends on how long they suspend production and sales, and how quickly they can define and fix the problem.

In the meantime I'd say it's as good a time as any to buy a Ford vehicle, even trade in your Camry or Corolla for one. And for Heaven's sake, buy the darn stock. When I started recommending it as a buy it was trading around $2.50 a share. It's now trading above $11 for a reason. Ford didn't take the bailout money, they're making great cars, and breathing new life into an old American icon.

That's got to be good for something.

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    • Springboard profile image
      Author

      Springboard 8 years ago from Wisconsin

      Rebecca—thanks for stopping by and stumbling me. :) Always good to hear your comments.

      daytripeer—I agree. Actually just wrote a new hub today making a comparison between Toyota and Tiger Woods. Things like this don't go away without leaving at least some kind of a scar. Thanks for sharing your thoughts.

    • profile image

      daytripeer 8 years ago

      Toyota may never get back to the same level they were at. I am sure they will eventually recover, but, maybe never fully. Good hub, very informative.

    • Rebecca E. profile image

      Rebecca E. 8 years ago from Canada

      oh boy here we go again! Stumbled Upon and bookmarked.

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