The Wall Street Journal broke the "soft" news last Saturday in its Weekend edition. Automotive News had a front page article with similar quips and quotes on Monday. No it wasn't news about Nissan's deplorable decision to move from its headquarters from Torrance to some little city twenty miles from Nashville, Tennessee; it was about Nissan's relentless competitor, Toyota.

Toyota's management is pretty slick. Part of that is Japanese culture; but Toyota's PR department that orchestrates and propagates Toyota's corporate image in the US is capable of the best special effects from George Lucas' ILM. The Prius is a masterstroke of marketing and engineering. Who doesn't think about a cleaner, greener environment when you see the Prius? The fact that you can instantly identify the Prius as both a Toyota and a hybrid at the same time and the fact that Toyota has the slickest marketing on the planet to pump up its "green" creds while ignoring the slew of trucks and SUVs that aren't so green, makes the relatively small profit Toyota says it makes on the Prius worth every penny of R&D. It's also the insidious, relentless, sleeper-style marketing that seems so normal that becomes part of the fabric of your everyday life.

It doesn't matter that the Prius doesn't get the advertised fuel economy. It doesn't matter that the car enthusiast magazines didn't like their long term Priuses. It didn't matter that Toyota had to issue a recall for almost all its second-generation Prius hybrids due to a software problem that led the cars to simply die while driving. Ask any Prius driver and they will tell you just how much they love it. I have talked to many of the brainwashed public and the love is universal. I can't even trick them into faulting the ergonomics or the highway mileage. The fact that we in So Cal still have to wait on a list to buy a Prius after two years on the market and the fact that Toyota has increased production to the point where suppliers simply can't supply the enough of the necessary for the hybrid systems tells you that it's a wave Toyota can ride for a while.

Last week, the business pages swirled with the sound of GM and Ford circling the drain. GM, as usual, got most of the negative spotlight. Editorials called for GM to declare bankruptcy as that would be the only way to salvage the company. Market shares -- both stock and consumer markets -- tumbled. Just a couple weeks after GM told its dealers to start selling cars because big incentives weren't going to be used on the 2006 models, GM pulls out another give-away Red Tag, distressed merchandise sale that will run until the end of the year. At least the big sale didn't apply to Cadillac, Hummer, Saturn or Saab. Ford got blasted for the "revolving door'" of "highly talented" executives. It was a blood bath last week at Ford. But my question is if these people were so f__king talented and qualified, why is Ford in the dumps with sinking market share, sales down across the board, and only one hit car so far this year -- the Fusion?

So what's happening at The Evil Empire, the enemy of Detroit, Toyota? Toyota was enjoying its market share gain -- almost the same amount lost by the Big 2 ½. Profits are up, demand was high. But note that profit isn't going to be quite as high because Toyota is spending so much cash (almost $12 billion) on plants and equipment and another huge chunk on R&D. The entire market capitalization of GM isn’t even $20 billion these days and Toyota spends almost that much on plants, equipment and R&D in one year.

On Monday, Toyota took out full-page color ads in the major newspapers proclaiming its "blue-sky" scenario: More US manufacturing jobs, cleaner US manufacturing plants. There is this fantastic picture of Toyota's Indiana plant, complete with the clearest bluest skies you could ever hope for. The caption says that the plant is the recipient of the "Governor's Award for Environmental Excellence" from 2002-2005. [Your barf bag is in the seatback in front of you.]

As Rick Wagoner at GM focuses on retaining his job and reducing GM's "footprint" in the US (i.e., getting rid of US factories and jobs), Toyota is worrying about not being able to meet demand in the US. Here's a quote you know didn't come out of an American company: "Demand has been stronger than expected." "It's not proper for [Toyota] to keep customers waiting. So we have to expand capacity both at home and abroad." That quote came from a senior manager in the finance and accounting group for Toyota in Japan. The statement is simple, but it's breathtaking for us in the US because we just don't hear things like that coming out of the lips of corporate executives.

You can bet The Evil Empire wants to avoid any finger-pointing when it comes to the collapse of the American automobile industry. You see, a little-published factoid is that Toyota has picked the number 60 as the percentage of US sales that it wants to supply from its North American manufacturing capacity. "Management" (wink, nod -- why didn't the WSJ attribute this quote?) believes that 60% is the threshold for being viewed an "American" producer. Note to PR department: Excellent work again!

I don't think I've ever heard an American company make that kind of commitment let alone care where it manufactures as long as it's done with the cheapest third-world labor. God, I hate Toyota, but they sure say -- and do -- the right thing. Now if they could just report the profits in the US rather than Japan, I'd be a bit mollified.

It's very much in the realm of possibility that by 2010, Toyota will not only be wearing GM's long-held crown as the largest automobile manufacturer (in terms of units sold) in the world, but it may very well be the company with the largest US manufacturing capacity and workforce!

Apparently not more an a nanosecond after Toyota bought GM's interest in Fuji Heavy Industries (parent of Subaru) it sent its engineers from its Ohio plant to Subaru's Indiana manufacturing plant so see if it could be quickly utilized by Toyota. You see, sales are so good for Toyota that it has to import more cars to the US than it would like. The Evil Empire has to maintain that artificial 60/40 domestic/import ratio, you know.

What's interesting is that Toyota pays a very good living wage to its auto workers and has very good relationships and logistics with its suppliers. Toyota assembly jobs are highly coveted among non-union auto workers. The company rarely has layoffs and it has a good benefits package. It's more expensive for Toyota to build the cars in Japan and ship them here. So it makes sense to build the cars here where it's cheaper and where the demand exists.

Toyota may not have the so-called "legacy costs" (defined benefit plans and retiree healthcare) of GM, Ford or Chrysler; however, in Japan, the social insurance tax is much higher than in the US and it contributes greatly to the health, safety and welfare of Japanese citizens. It also pays for the Japanese national healthcare system. But here's the deal: Toyota management wouldn't have played fast and easy with its pension funds if there was any hint at under-funding. In Japan, if there is a corporate scandal, the executives immediately resign in shame, with no golden parachutes. Worse, if a company goes bankrupt -- a rarity in paternalistic Japan -- the entire management team at the company resigns in shame. Their family feels and bears the shame as well. In the US, executives keep getting golden parachutes, huge severance pay, bonuses, stock options and there is little or no shame. If you don't believe me, look at a video of Bernie Ebbers, former WorldCom CEO and Chairman when the judge sentenced him to 25 years in prison. The look was complete disbelief and shock. To the very end, he didn't think he'd done anything wrong and certainly didn't think he'd have to spend a day in prison for his egregious white-collar crimes.

There is a very big difference in cultures and management styles when you compare Japanese and American business practices. While I still don't like Toyota, the Japanese style of management used by the big players in the US market -- Honda, Toyota and (until last week) Nissan - seem to have prospered where the American model (whatever you want to call it) has failed. These days, you have better job security with the Japanese manufacturers than you do at any of the Big 2 ½.

With Toyota's ten US plants, including design, research and development, sales and marketing operations, not to mention its operations in Canada and Mexico, Toyota is in aggressive growth mode. Its new gigantic truck manufacturing plant in Texas is almost ready to come online and Toyota is actively looking for other manufacturing and assembly sites. With the Indiana Subaru plant likely to be the first to go online, Toyota is still looking for other manufacturing/assembly locations. Toyota's West Virginia transmission plant is online and has capacity to make 360,000 transmissions. But that isn't enough. Toyota is boosting that to 600,000 units by 2007. And even if Toyota buys all the output from its transmission specialist affiliate, Aisin Seiki, whose capacity is 300,000 units in its North Carolina plant, it still isn't enough.

The obscenity of state and local governments begging and bidding for automotive plants in their state or county is in high gear. Hot on the heels of the shameful gift of public land and tax breaks in Tennessee to Nissan, several states are groveling at Toyota's doorstep. The top four states, according to the WSJ's report, are New Mexico, Michigan, Indiana and Mississippi; but Alabama, Tennessee and Arkansas have done some major sucking up too. This direct gift of public tax dollars and property should be illegal on every level, but it's not.

It's no secret that Michigan, and Detroit in particular, have suffered major job and tax revenue loss with the precipitous downfall of the US automotive giants Ford and GM. Toyota is already expanding an engineering center near Ann Arbor, Michigan, and it hasn't ruled out a plant in Michigan. I think Toyota executives are particularly cautious when it comes to a manufacturing plant in Michigan. The last thing the The Evil Empire wants is to be caught in a web of anger or controversy. They want to be welcomed with open arms (and open state coffers) wherever they go. Would it be a benefit or a mistake for Toyota to open a modern manufacturing facility in or near Detroit? I don't know the answer, but how bad would it look if Toyota bought an idle Ford or GM plant and turned it into a full capacity manufacturing or assembly facility? Ouch!

Toyota is not going to stop being relentless. Automotive News couldn't get an interview with Toyota's President Katsuaki Watanabe, so they pulled quotes out of Toyota's annual report (published in both Japanese and English, of course). Here's the short list of Toyota's goals (not accomplishments): Toyota believes on building vehicles where the demand exists. The company plans to double annual vehicle output -- outside Japan -- to 5 million units. Toyota predicts that its North American sales will increase by 12.3% in 2006 to a record 2.55 million units. Toyota's worldwide sales are predicted to be 8.03 million by the end of 2005. [Note: In 2004, GM produced 8.7 million vehicles world wide. Toyota could overtake GM in 2006.]

Mr. Watanabe believes that "stagnation is synonymous with retreat; the outlook is bleak for any company that cannot sustain growth." [Has the GM board read Toyota's annual report? If not they should.] And finally, Mr. Watanabe warns "Make no mistake, Toyota is bursting with energy and its appetite for growth is truly insatiable." Is this The Evil Empire talking or what? Relentless -- you bet. You haven't seen anything yet. This company is almost dangerous; but these days, its US face bears more resemblance to what Americans are looking for -- both in an automobile and in a job - than any one of the Big 2 ½.