Toyota City feels the painIan Rowley
Japan’s automakers aren’t seeking bailout, but Toyota’s hometown may soon need a helping hand. According to reports in the local media, Toyota City expects its tax income this year to fall 90% short of its target. The city, which is twinned with Detroit and was called Koromo up until 1959, had been expecting to raise $455 million in taxes, but with its resident car maker’s profits slumping, it now only expects to rake in $43 million—not much for a city of 400,000.
Predictably, city officials are taking a Toyota-type approach to the crisis. Rather like Toyota’s recently formed Emergency Profit Improvement Committee, the city plans to undertake a raft of cost-cutting measures, including a 35% reduction in spending on construction projects, reports the Nikkei. That’s not the only thing in common it has with cash-rich Toyota. To see it through the bad times, Toyota City can draw also on $925 million of reserves to cover any shortfall.