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Toyota Motors (TM)-More problems ahead

|Includes: F, Toyota Motor Corporation (TM)

Toyota's (NYSE:TM) spokesman Mike Goss confirmed today that they will suspend production for 3 additional days in addition to it's scheduled production breaks during the weeks of March 15 and April 12. The Kentucky and San Antonio plants will be affected. The Kentucky plant produces the Avalon, Camry and Venza while the Texas plant makes the Tundra truck.

Dealers have been dealing with the recall issue in relation to the gas pedal, breaks and floor mats. The workers will be kept on the payroll and paid during this additional unscheduled production lapse.

Obviously they have inventory building up since they stopped selling the vehicles and how many people are willing to buy a Toyota with the ongoing investigation still under way is to be seen. From past experiences the automakers typically
underestimate the fallout from such issues.

Federal regulators have now received 34 complainants of deaths attributable to unintended acceleration. That number is surely to move higher. As more people become aware of the issue's I have to believe that many will join the class action lawsuits that the attorneys have already started to advertise about.

Toyota estimated today that they have repaired 500,000 of the 2.3 million vehicles that it's recalling.

I would keep a close eye on this situation and any opportunity for Ford in this matter. We have already seen that Hyundai is experiencing an increase in sales as a result of the Toyota issues.

Toyota will have be to aggressive in it's public relations and marketing to attract people back to the brand. In some cases people may avoid the manufacturer completely. We are talking about people's safety and if you have a family why take a chance?

I have to figure that when March sales come out in a few weeks we will see the "Toyota affect" on Ford. I haven't seen any of the analysts February sales estimates increase based on the Toyota problems so this may be an opportunity to get a nice bump in Ford in the coming weeks.




Disclosure: Own puts on TM. Puts and calls on F