Toyota's troubles keep growing

Is it just me, or do the troubles of Japanese automaker Toyota Motor Corp. seem more American every day?

Sales are down 34% this year. The automaker lost $4.8 billion in its last fiscal year. The company says it might not be profitable again until 2011. Toyota is now cost-cutting and confronting a list of problems that always seem to catch up with global companies that have been around for a while.

Aside from some troublesome brand problems with Lexus, outlined Sunday by Free Press auto critic Mark Phelan, the automaker is also facing a lawsuit that could be a public relations nightmare for the automaker.

What's more, CBS this weekend reported that a former Toyota attorney is accusing the automaker of illegally withholding evidence in hundreds of rollover death and injury cases, in a "ruthless conspiracy" to hide evidence of "its vehicles' structural shortcomings."

Toyota calls the accusations "inaccurate" and accuses the attorney of violating "his ethical and professional obligations."

But regardless of the truth, it's pesky stories like these that nibble away at a company's image over the long haul.

Plant closure won't help Toyota

Toyota still has a lot of cash to fix its problems, and it was the No. 1 beneficiary of the cash-for-clunkers program. But the automaker's decision last week to close its assembly plant in California is probably not going to help its image matters.

Toyota said it would close its New United Motor Manufacturing Inc. plant in Fremont, Calif., in 2010, after General Motors decided to pull out of the 25-year-old joint venture as part of its broad reorganization plan. The NUMMI plant employs 4,500 UAW-represented autoworkers and an estimated 35,000 supplier and other spin-off jobs are expected to be indirectly impacted.

West Coast opportunities

All in all, I'd say Toyota's slippage translates into a grand opportunity for Detroit's automakers in California.

California is the top auto-buying state in the country, largely because of its size and population. So if the Detroit Three are ever going to truly recover in the United States, picking up market share in the Golden State will be critical.

But Detroit's automakers have struggled mightily there for decades.

In many ways, that's the Detroit Three's own fault. They resisted regulatory changes there and too long lagged Japanese automakers in quality and fuel-efficiency.

While the facts have supported a positive shift in the Detroit Three's favor for some time, however, it's been more difficult to make consumers believe.

Given Toyota's stumbles, though, there seems to be an opportunity for the Detroit Three to take back some of the California pie.