Print this Page | Digg It | del.icio.us

Tags: toyota hybrid prius jim press japan japanese chrysler subsidy subsidize

Tag Link: toyota hybrid prius jim press japan japanese chrysler subsidy subsidize

Jim Press clarifies statement on Japanese government's support in Toyota hybrid technologies
Did former Toyota executive James Press rat out his old company? Or was he just pointing out how smart the Japanese were to back gas-electric hybrid technology, which has been a boon to the company’s fortunes and image, especially in the U.S.

Chrysler LLC vice chairman Press said Wednesday that he was not intending to speak negatively about Toyota when he told BusinessWeek that the Japanese automaker benefited from government investment in its gas-electric hybrid technology.

Press was responding to a statement made by Toyota, where the Chrysler executive worked for 37 years and served as a board member before leaving last year, denying Press’s assertion made in an interview with BusinessWeek on March 20 that the Japanese government had subsidized “100% of the research and development costs” of the automaker’s gas-electric hybrid system that was launched in the 1997 Prius and now powers all of Toyota’s hybrid vehicles.

In a wide-ranging interview with Businessweek editors and two correspondents that also included Chrysler LLC CEO Robert Nardelli and vice chairman Tom Lasorda, Press said on-the-record, “The Japanese government paid for 100% of the development of the battery and hybrid system that went into the Toyota Prius.” He did not specify the forms those investments took. But the statement contradicted those made by Press when he was a Toyota employee.

Toyota refutes Press’s claim. “I can say 100 per cent that Toyota received absolutely no support - no money, no grants - from the Japanese government for the development of the Prius,” said Toyota’s Tokyo-based spokesman Paul Nolasco.

In a statement by Press released through a spokesperson, he doesn’t refute what he said to BusinessWeek on March 20. “The Japanese government strongly supported R & D (research and development) investment in battery development, and the Prius and other Japanese models benefited from that investment.” He cited this “investment” as an example of cooperation for the U.S. government and industry. “Instead of being at odds with each other over CAFE [Corporate Average Fuel Economy] and other policies that put U.S. companies at a disadvantage, the two should work together to find technological improvements that help give U.S. companies a competitive advantage,” said Press.

Press, through a spokesperson, would not clarify what he meant by “support” or “investment.” The Japanese government, for example, has long supported technology initiatives to lower tailpipe emissions and increase fuel economy to lessen smog in its crowded cities through consumer tax incentives. Japan’s “Green Taxation” system, for example, gives consumers a tax credits to purchase low-emission vehicles to offset a portion of sales tax paid on a new car, a system similar to consumer tax incentives in the U.S. to buy hybrids and electric vehicles.

In the interview with Businessweek, Press was clearly talking about direct subsidy by the Japanese government, not consumer tax credits. I stand by my account of the story, as does BusinessWeek.

Press’s assertion to BusinessWeek, said Toyota’s U.S. spokesman Mike Michels, contradicts statements Press gave to media while he was an executive at Toyota. Michels acknowledged that the question of Japanese government incentives has been asked from time to time by reporters because U.S. automakers have long alleged that such subsidies gave Toyota an unfair cost advantage over U.S. automakers in developing the Prius.

Press, noted Michels, also told the House Committee on Energy and Commerce last year that Toyota received no R&D subsidy for its hybrid technology. In a hearing, titled, “Climate Change and Energy Security: Perspectives from the Automobile Industry,” on March 14, 2007, Press testified: “The development of the program itself was about a 7-year project when we got into production. The concept of a hybrid, though, goes all the way back to the 1900s. It’s technology we’ve been working on for a very long time.”

Because there is disagreement in Congress and in the federal government over the levels of financial support that should be given to automakers and consumers to advance low-emission and high-fuel-economy vehicles, Press was specifically asked by Rep. Michael Burgess (R-TX) if research and development for the Prius was funded by the Japanese government. Press’s response: “No, sir.”

In the interview with BusinessWeek, Press explained that Toyota’s gas-electric hybrid system was originally developed for the Japanese market, and funded by government investment. The U.S. was a secondary market for the car, but one that proved more successful than Japan where hybrids have been slower to catch on.

Why is this question of direct investment by the Japanese government such a big issue?

There has been enormous tension between U.S. automakers and Toyota over gas-electric technology. The U.S. auto industry has spent billions of its own money, as well as government grants, pursuing electric cars that run on batteries, as well as those that run on hydrogen fuel cells.

U.S. automakers dismissed gas-electric hybrid systems in the 1990s, writing them off as too expensive and inefficient. Toyota, though, pressed the technology, turning the Prius into a sales and public relations phenomenon. Toyota is the world-wide leader in hybrid vehicle sales and, on the back of the Prius, is widely viewed by the public as the “greenest” car company in the industry. U.S. auto executives have long maintained the only reason Toyota was able to bring its hybrid vehicles to market without losing billions was because of government subsidies.

A large part of Toyota’s Prius narrative has been that it developed the system entirely on its own, and that it had no unfair advantage over Detroit. Press’s remarks to BusinessWeek, while not detailing what forms those subsidies took, contradicted that. Read Article



Comments:

Images hosted in your AgentSpace can now be posted in the comments section using the following syntax (case matters):
[img]IMAGE URL[/img]
Example: [img]http://agent004.myautospies.com/users/150/Sample-Gallery/sample1.JPG[/img]
Agent009Agent009 - 4/3/2008 3:41:34 PMView My AgentSpace
+3 BoostDrop the Boost Up the Boost
Good post, shows the other side and clarifies the statements.

reply to this comment
1970toyotamarc1970toyotamarc - 4/3/2008 4:09:17 PM
+5 BoostDrop the Boost Up the Boost
Thank you XeroK00L.

reply to this comment
bigmotovbigmotov - 4/3/2008 4:40:26 PM
+3 BoostDrop the Boost Up the Boost
This is how it should have been posted to begin with.

Thanks!

reply to this comment
TopGearTopGear - 4/3/2008 5:50:28 PM
+3 BoostDrop the Boost Up the Boost
Good move by Japanese government and the auto makers. They started it not just to save fuel expense but also to protect environment (Something China will never learn); The good motivation is being rewarded. In contrary, U.S., backed up by lobby from gas suppliers , killed all fuel efficient projects in 90s.

reply to this comment
tundrahqtundrahq - 4/3/2008 6:12:14 PMView My AgentSpace
+3 BoostDrop the Boost Up the Boost
There's a long tradition of government corruption and collusion with major industry in most parts of east Asia. The Korean, Japanese, and Chinese governments have often been caught secretly subsidizing their most important industries. This is unfortunate, but it really comes as no surprise. I do believe some of Press's comments are a bit of sour grapes - it was such a blanket statement, yet he isn't willing to specify how these subsidies were received, etc. In any case, this certainly casts more doubt on Toyota's commitment to the environment.

reply to this comment
1970toyotamarc1970toyotamarc - 4/3/2008 6:42:20 PM
+2 BoostDrop the Boost Up the Boost
"this certainly casts more doubt on Toyota's commitment to the environment."
That was half Press's goal, the other half was to persuade the US govt to match the supposed, alleged Japanese investment (about which he could provide no details and had previously denied any involvement).

Sour grapes indeed, but unfortunately much more calculated and shady than that.

"There's a long tradition of government corruption and collusion with major industry in most parts of east Asia"
In the US too, I'm afraid. Government is a tool of industry.


ChicaneShooterChicaneShooter - 4/5/2008 8:54:59 AM
+1 BoostDrop the Boost Up the Boost

"Press, through a spokesperson, would not clarify what he meant by “support” or “investment.” "

my half-wild-assed guess, is that toyota got TAX CREDITS for the R&D on hybrid development, or at the least, write-offs. so no direct investment by the gov't, but support anyway thru tax credits/write-offs.

i had read once that all the money toyota (and honda) pump into their racing programs, are considered "advertising expenses" and thus reduce the taxable incomes. i have not verified this from other sources, but it is plausible.

the development costs for the Prius likewise mite've been allowed to reduce net profits. making the program "gov't supported" but INdirectly. and still, in any case, it WAS toyota's money, not taxpayers' that was spent.



reply to this comment
ChicaneShooterChicaneShooter - 4/6/2008 5:32:26 AM
+1 BoostDrop the Boost Up the Boost
1979toyotamarc:

"There's a long tradition of government corruption and collusion with major industry in most parts of east Asia"
In the US too, I'm afraid. Government is a tool of industry.


various industries and even specific companies, ALL compete for a place at the teats of national governments. EVERYWHERE.

at one time, gov't was intended to serve PEOPLE. nowadays, it serves mainly those who scramble to the top of the hill in BUYING favors and influence.

the u.s. has "The best 'democracy' that money can buy!"






reply to this comment
To post a comment for this story, you must first Login.

If you do not have an account, you will need to Register (It's Free!).

Most Recent Stories
Toyota Sales Spiral In November Down 33.9%: Lexus Basement Bound Down 34.7%FOMOCO Sales Continue To Flatline: Down 30.6% In NovemberVolkswagen Finally Fumbles In 2008: November Sales Drop 19.2%Japanese and South Korean Car Sales Plummet in NovemberComparison Test: 2008 BMW M5 vs. 2009 Cadillac CTS-V vs. 2009 Mercedes-Benz C63The Big Three Bailout According to SNLNissan 370Z goes from 0 to 60 in the same time as the BMW M3Mulally chooses Escape Hybrid for D.C. road tripFisker to unveil production Karma Hybrid in DetroitToyota Halts Production And Cuts Management Bonuses To Maintain Positive CashflowChrysler says 2011 Charger and 300 will pass fuel-economy standards2009 GMC Yukon XL DenaliFORD CEO Alan Mulally Will Drive to Washington D.C. To BEG For Money - But What Car Will He Drive To D.C.? His Lexus, OR Perhaps Maybe a Ford Product?Industry Sales Likely To Be Down 28% In November GM May Fare WorseLotus Evora order list includes 007 and Top Gear hostsEveryone Is On A Budget, But Are These 5 Your Choice To Keep Living Large?Could The Detroit Recovery Plan Really As Simple As Merging In To One?Fiat Abarth 500 receives Top Gear’s “Best Hot Hatch” awardDetroit Tells UAW They Can No Longer Pay For Idled Workers To Play Checkers2010 Porsche Panamera auto show debut delayedSwedish Government Confirms Discussions With Volvo and SAABBMW not putting MINI E into mass-productionTop Gear Car of the Year 2008 award goes to VW SciroccoNew Mitsubishi Lancer EVO X FQ-400: Limited Edition with 405HP2009 Nissan 370Z Driven in Japan2010 Jaguar XF-R spotted nearly finishedUAW wants limits on carmakers' executive payDoes It Hurt The BMW Brand Image When They Are Being Sold At Costco?2008 Essen Motor Show: Vw unveils Touareg North Sails EditionCarlsson releases limited edition automatic watchVideo: 2009 Mini Cooper Cabrio in actionPorsche Museum to open its gates on 31 January 2009Vw Eos White Night Edition unveiled at EssenUPDATE 1-German carmakers make fresh move to cut outputAudi R8 GT3 LMS Hits the Track (Video)GM UK takes two Top Gear awardsBMW Konfigurator Using Microsoft Surface for Product NavigatorHow About A Piece Of Kim Kardashian's Booty For The Holidays?Cars They Wish You'd Forget About - "Hey, they can't all be winners!"Acura V8 won't Arrive Until 2015: ReportBrabham M3 revealed at the Essen Show2008 Essen Motor Show: Dodge Challenger SRT8 by EibachNissan 370 Z Japanese Promotional VideElite Carbon Maserati Gran TurismoMarangoni M430 based on Alfa Romeo Mi.To2008 VW Scirocco Collectors’ Edition debuts at EssenFord at the top of the list for safety in accidentsBamford releases custom Rolex Daytona Ferrari red watchRolls-Royce RR4 to reveice Bmw’s iDrive technology2009 Vw Golf VI by ABT shows up at Essen