Toyota makes it look easy -- automaker races back in the black

Well, maybe that's why it pays to hire a good accountant. Toyota Motor Corp. announced Monday that it is profitable again despite being accused of safety lapses, paying millions of dollars in fines and being forced to recall millions of cars around the world. Toyota, the world's largest automaker, reported a profit of $1.2 billion in the first quarter of 2010 after losing millions of dollars in 2008 and 2009. “After taking over amid a storm, I wanted to do anything to avoid a third straight year in the red,” said Akio Toyoda, Toyota's president, according to the New York Times. Toyoda said the automaker had made "tough and anguishing decisions" to return to profitability, including cost-cutting and layoffs in Japan and in other countries where Toyota cars and trucks are manufactured. The company said it expected to make more than $3 billion this year as its worldwide sales surged, particularly in the United States and China. The rebound surely is good news for slumping U.S. automakers General Motors, Ford and Chrysler, if it reflects worldwide trends. GM and Chrysler borrowed billions of dollars from the U.S. and Canada to stay afloat during the global recession. But Toyota's good news could not completely obscure problems looming in the near future for the automaker. The U.S. National Highway Traffic Safety Administration announced this week that it was investigating the company's handling of a steering defect in its popular Tacoma truck after denying it for a year. “We’re still in a storm — there’s been no change on that front,” Toyoda said. “But from the storm, we’ve begun to see glimpses of sunny but faraway skies. I feel that we’re starting to approach safer waters.” Toyota still faces lawsuits from car buyers claiming injuries causes by acceleration problems and a series of shareholder suits. U.S. regulators also are considering imposing additional fines on the automaker, which paid a $16.4 million fine -- the largest permitted under U.S. law -- to the Transportation Department in April.

Still-sinking Japanese economy demonstrates the perils of public debt

If Japan's government is still in business, there's got to be hope for any and all countries burdened with debt -- even seemingly crushing debt. Lawmakers in Tokyo approved a trillion-dollar budget Friday that -- get this -- includes $485 billion in new debt that will push the country's indebtedness to nearly twice its gross domestic product, according to the New York Times. At 181 percent of GDP, Japan has by far the largest debt in the industrial world, the Times said. The new budget, which exceeds a trillion dollars for the first time, includes new spending on the country's education and welfare programs to help stimulate the economy, which is suffering from high unemployment and deflation. The budget is the first for the new government of Prime Minister Yukio Hatoyama, the Democratic Party candidate elected in September in an upset of the Liberal Democrats, Japan's majority party for nearly all of the past 55 years. In televised speeches Thursday and Friday, Hatoyama defended his spending plans, which shift the government's focus from public works projects to direct payments to individuals. "Together with all of you, I want to build a better Japan, a new Japan,” he said at a news conference. “I have adhered to the principle that people matter more than concrete." But there are signs that the Japanese people are starting to have doubts about the Democrats. Hatoyama's popularity rating has slipped below 50 percent from a high of 71 percent after the election, the Times said, although that could be due in large part to an accounting scandal involving his party. The scandal has imperiled the Democrats ambition to win control of the upper house of Japan's parliament in midterm elections next year, the Times said, and appears to have affected negotiations with the United States on the future of the giant U.S. airbase on Okinawa.

World's richest nations plan economic recovery

Maybe the worldwide recession actually is over. The world's eight richest nations ended two days of talks Saturday in Italy to plan for the expected worldwide economic recovery, according to the Reuters international news service. Or maybe the recession is about to be over for them. Meeting in Lecce, finance ministers of the world's eight richest nations began getting ready for the end of stimulus programs propping up their economies. "The force of the economic storm is receding," U.S. Treasury Secretary Timothy Geithner said as the Group of Eight meeting concluded. "There are encouraging signs of stabilization across many economies." Ministers agreed that the stimulus programs would not be ending anytime soon, however, and also agreed to ask the International Monetary Fund to help them figure out the best way to bring the programs to a conclusion. But there appeared to be sharp disagreement on how to roll back stimulus spending plans and how to stress-test each country's banks, Reuters said. In fact, Russian finance minister Alexei Kudrin called the meeting "stormy" since there were major arguments about what stage the crisis had reached. Conservative nations like Germany and Canada are pressuring other G8 nations to end stimulus programs to keep interest rates from rising too rapidly once the recovery takes hold. But Geithner said the United States would probably not be tightening monetary policy anytime soon. "It is too early to shift toward policy restraint," he told the ministers. Reuters said a G8 source who did not want to be named said the IMF report would likely be presented in October at the fund's annual meeting in Istanbul. Private sector economists do not expect tightening of fiscal and monetary policy before next year, Reuters said. The other G8 nations are Japan, Britain, France and Italy.