Toyota Announces First Operating Loss
NGUYEN: It's 31 past the hour on this Monday and here are some of the stories that we are working on in the CNN NEWSROOM. Bundled up in the Midwest and across the east, frigid temperatures plus falling snow add up to a messy Monday. Weekend flight delays and cancellations left lots of travelers camping out in airports. Investigators still combing the wreckage of a Continental jet for clues to Saturday's accident. The plane veered off the runway after an aborted takeoff from Denver. The NTSB will hold a live briefing at 4:30 Eastern. And Toyota gives a sneak peek at earnings and it ain't pretty folks. The Japanese car maker says the fiscal year is expected to post its first operating loss in decades. The company points to sagging auto sales worldwide. Nearly two million Americans have lost their jobs this year. So will 2009 be a fresh start? Susan Lisovicz is on the floor of the New York Stock Exchange with a look at what we can expect. I sure hope it's a fresh start Susan, especially after what we've been through.</s>SUSAN LISOVICZ, CNN CORRESPONDENT: No question about it. We've been through a very tough year and it should continue into the new year. No question about that either Betty. A new forecast from Challenger Gray and Christmas, which is an outplacement firm says job cuts next year, well, they'll be great, a million jobs. That's not quite as big as two million. But no question that the pain would continue. The recession has hit just about every sector of the economy hard. Two bright spots have been energy and education. But the study says those two are going to be hit. Why? Energy, for instance, oil prices have collapsed since July, down more than $100 per barrel with oil prices. So you're seeing a lot of delays in projects, whether it's exploration or research and development. In terms of education, we have seen so many communities, whether it's local or state, that have been hard hit from the downturn in business and tax receipts that they are hurting as well. So you may see some cutbacks there as well. Betty.</s>NGUYEN: All right, so as we look to the future, what about the incoming administration? President-elect Obama has been very vocal about creating jobs, making that his priority. Is there a lot of hope there?</s>LISOVICZ: There is a lot of hope there and a lot of economists say that that's what needs to be done despite the enormous deficit we already have, that we need to have a big, big stimulus plan. And the president-elect has said he's talking about saving or creating three million jobs. Even if that were to be successful, it takes a while for that to ripple through the economy. It's an enormous project and it would take a while. Not only that, layoffs are a lagging indicator. It's the last thing employers do to either stay afloat or stay competitive. So for instance, after the last recession in 2001, the unemployment rate kept going higher even after the - technically after the expansion began. So those are things to consider. In the meantime, what we're seeing receding is the market. The Dow industrials right now down just modestly, 33 points. The NASDAQ is down by a similar margin and oil prices by the way are down more than a buck, $41 a barrel, just to have highlight the incredible decline that we've seen in that commodity this year, this incredible year Betty.</s>NGUYEN: Incredible. That's one way to put it. OK, thank you Susan. So you better fasten your seat belts for a new sign of global reception. You ready folks? Toyota, the world's largest auto maker is forecasting an operating loss for the first time since it began reporting results back in 1941. Mark Gillies is the executive editor of "Car and Driver" magazine. He joins me now from Ann Arbor, Michigan. First loss since they started even tracking those numbers back in 1941. Is this a bit of the shock to the industry?</s>MARK GILLIES, EXEC. EDITOR, CAR AND DRIVER MAGAZINE: I think it's a huge shock to the industry in some ways, but in others it's very expected because the markets worldwide are in complete disarray. Compounding the problem for Toyota is the fact that the yen has gone up 25 percent in the past four months. This means that for every car that Toyota sells in its most profitable market, which is the United States, is actually losing 25 percent in terms of yen going back to home base.</s>NGUYEN: A lot of people have really said, OK, the big three, you need this bailout because people aren't buying your cars. Let's look at Camry for example. It's been one of the best-selling cars out there on the market. Yet we're seeing Toyota post a loss. So is this indicative of the fact that it's not really about the product. It is more about the whole market in general?</s>GILLIES: I think it is. I think it's indicative of the fact that people just aren't going into showrooms to buy new automobiles. If you look at the rest of the world, for instance, Europe lost 25 percent sales in November. The U.S., it was down 36.7 percent in November. So it's not just people in the United States aren't buys cars. It's people around the world, period aren't buying cars.</s>NGUYEN: Will this loss have the same effect have the same effect in Japan as the big three situation has had here in the U.S.?</s>GILLIES: I think in some ways it's more dramatic because the Japanese have always looked at Toyota as a pillar of their manufacturing establishment. Remember, Toyota has not lost money since 1941. So this is a real blow to Toyota and it's a colossus in Japan. I think in the U.S., we're almost used to the Detroit three going through boom and bust. I think the Japanese industry has been a bit more robust over the past 30 or 40 years in that regard.</s>NGUYEN: But what does it mean for those U.S. workers who build for Toyota? Is this going to affect them?</s>GILLIES: I think it's already started affecting them because some of the plants around the country, they haven't actually laid people off as yet, but people have been idled on building cars. They've actually been doing other things around the factory. But they haven't been making cars and there's got to come a point in which Toyota says we're going to have to idle people and send them home. I don't think at the moment they would think about shutting any factories, but we know that their plans to build a plant to build the Prius have been put on hold.</s>NGUYEN: OK, let's play off of that for just a second. So what does Toyota's loss really say about the future of this industry?</s>GILLIES: I think it tells you that unless there's a rebound in the world's economy, then the industry faces some massive problems. The obvious one is there is huge overcapacity and there are probably too many big car makers to satisfy the demand. I think one of the other things that you noticed is that it's being fueled by cheap money. The car industry success is being fueled by cheap money and it's being fueled by rising home prices and people using equity in their homes to buy a new automobile.</s>NGUYEN: It's all connected in one way or the other. Mark Gillies, executive editor of "Car and Driver" magazine. Thanks so much for your time today.</s>GILLIES: Thank you.</s>NGUYEN: So you've got to give them credit. It is creative. Apparently some credit card companies are analyzing where you pay with plastic and they might cut your credit limit if they don't like what they see. That's right. Some Amex customers have gotten this letter. Take a look. It says, quote, other customers who have used their card at establishments where you recently shopped, have a poor repayment history with American Express. All right, so the company says it is just trying to manage its risk. Consumer advocates though charge this is unfair and it is guilt by association. Talk about the weather. Look at that, kind of nasty out there. The big chill from coast to coast, snow, ice, below zero temperatures all across the weather map on this first full day of winter. Can you believe it, just the first full day? Parts of Maine are buried under more than three feet of snow. One town actually got under 42 inches. This nasty weather has made driving extremely dangerous and it is snarling air traffic and some of the country's major airports including Portland, Oregon.</s>UNIDENTIFIED MALE: We are getting out earliest was December 25th, Christmas day in the evening.</s>NGUYEN: Our Chad Myers is tracking all of this bone-chilling weather for us. And Chad, bone chilling, gosh, that's really the best way you can describe it out there, because it is not very pretty.</s>CHAD MYERS, CNN METEOROLOGIST: No it isn't. I just checked PDX, which is the Portland airport code and only five planes are in the sky now from Portland and one of the reporters about an hour ago said over 120 have been canceled for today. So they are just -- it's a slow process of trying to get planes back in. Twenty planes are in the air to Portland but only five are in the air away. So they have to get planes there and get people on them and then try to clear that mess out. It's going to take a while. Here's the wind chill in Kansas City, six below, Chicago, 17 below. The wind chill factor slowing down the airport workers as well today. You're going to have to be patient with your bags and your checked bags may take a little longer because it's going to take longer for those people out there to deal with 20 and 30 degree below wind chill factors. It's cold in the east. It's snowy in the west. Have a lot shot from LAX where it has been raining a lot of the morning. This has not helped with the traffic. The airport's doing OK, 130 planes in the sky out of LAX. But I think we still had that shot from K-Cal (ph). It's a shot where you can just see cars just backed up and you're waiting to get in line to hurry up and wait some more. Because the TSA lines there are getting longer and longer as we speak. Doing as best as they can. But you've got to make sure that you're not packing stupid stuff that takes them time. That 3311 rule, whatever it is. You can't have anything more liquid than in that one quarter zip lock or equal container and people don't do it very well. That slows the guy in front of you down and behind you. It turns into a big old domino effect. So do your due diligence. If you don't know what to do, you got to just go on and find the TSA web site and they'll tell you what you need to do and how you're supposed to pack for this Christmastime.</s>NGUYEN: I'll tell you what to pack, some patience because you're actually going to need it out there. Thank you, Chad Myers. And we do have this just into CNN. We have learned that a jury has convicted five men accused of plotting an attack to kill soldiers at Ft. Dix in New Jersey. On the phone with us is Sunny Hostin, our legal analyst here at CNN. Sunny, so when we look at this conviction, I mean what kind of evidence did they have? Was this a strong case?</s>SUNNY HOSTIN, LEGAL ANALYST: It was obviously a very strong case. I mean, initial leap this was a Circuit City store clerk that told the FBI about footage of seeing them, the defendants, firing assault weapons and screaming about jihad on the video that they had asked the store clerk to transfer to a DVD. So they actually had that sort of visual. They also, Betty, interestingly enough, had a confidential, undercover FBI cooperative that set up a sting and tried to get them and got them to purchase guns. And so the evidence was obviously very compelling and this jury took over six days to deliberate. So this was not an easy thing for them to come to, but they obviously reviewed all the evidence and came down with guilty verdicts.</s>NGUYEN: So now that five of them are convicted, want to say there were actually six people who were arrested, but the sixth defendant actually pleaded guilty last October to a reduced charge of providing firearms to illegal aliens. But when you look at these five convictions, what do they face when it comes to sentencing?</s>HOSTIN: They face life in prison. I have to tell you, they were charged with conspiracy to kill military personnel, possession of machine guns, possession of weapons by illegal immigrants and that charge, conspiracy to kill military personnel, they were found guilty of, carries a life in prison sentence. That's very, very serious. We know in this climate, most judges look at this extremely seriously. We're talking about, you have a group of people that are willing to kill armies, military personnel, what else would they be willing to do? And I would save it's a very good chance, a very likely chance that these men will spend the rest of their lives in prison. They are in their 20s. That's going to be a long, long time.</s>NGUYEN: When we look at this plot to attack and kill soldiers at Ft. Dix, do you know how close they were to actually going about and carrying that out?</s>HOSTIN: My understanding is that they went so far as to practice to shoot, to scope out Ft. Dix. Apparently one of the men was very familiar with the base and chose that one because he had been delivering pizza for his father's business to the base. They scouted it out and then tried to purchase the guns. They were fairly far in their plan to execute military personnel.</s>NGUYEN: Today a jury has convicted those five men accused of plotting that attack. That is the latest news that we have. Of course we'll continue to follow this, because the sentencing phase is next. Sunny Hostin joining us on the phone. Thank you for that Sunny. There's much more to come right here in CNN NEWSROOM.