The folks in Detroit may be pleased to see Toyota Motor Corp. (NYSE: TM) cutting its sales forecasts, but the pleasure is sure to be short lived. Despite its more modest outlook, Toyota leads General Motors (NYSE: GM) in global vehicle sales -- and its lead is only getting bigger.

According to a report on Reuters, GM sold 4.54 million vehicles worldwide in the first two quarters of 2008. This represents a 3% drop from the same period last year. Although sales in Europe, Latin America and Asia actually rose, the General couldn't overcome a whopping 15% decline in North America.

Toyota, on the other hand, saw a 2.2% increase in global sales, to 4.8 million units. This gives Toyota a lead in the range of a quarter million vehicles or more. And with its global sales growing, the lead is likely to widen, especially as Toyota switches over to producing more efficient cars in North America and fewer of the wasteful trucks that Americans loved so much until just a few weeks ago.

As Autoblog points out, the sales crown is important to both companies, although neither will admit it publicly. GM was the global sales king for 77 years, and the loss of that title will certainly hurt. Last year, the sales race ended essentially in a tie. But with these results, it looks like Toyota will be the champ in 2008 and, in all likelihood, beyond.

As if Detroit needed any more bad news, there are reports that yet another foreign producer of sensible, efficient and fun to drive cars is planning a raid on the domestic market share of the SUV-producing giants.

Apparently Germany's Volkswagen (OTC: VLKAY) is considering building a new plant in Alabama to produce Jettas and next-generation Passat sedans, and possibly a small new SUV called the Tiguan, as well as the Audi A5. The plant will cost an estimated $788 million and employ several thousand workers. No decision was made about the plant's location at a meeting on Wednesday by Volkswagen's management board, and VW is reportedly also considering sites in Tennessee and Michigan.

This would not be the first time VW produced cars in the U.S. From 1978 to 1988, the company produced over a million vehicles, mostly Rabbits, in New Stanton, Pa., near Pittsburgh. But VW's quality and reputation suffered in the 1980s, and the company now has less than 2% of the American market. However, VW is making a great comeback across the globe, and senior managers must think the time is right to start selling more cars in the massive North American market, the world's largest.

It turns out that former hedge fund manager and convicted swindler Samuel Israel III did not in fact kill himself. As I, and others, have suspected, he headed for the border after faking his suicide on June 10, the day he was suppose to start serving a 20 year sentence for fraud. But it wasn't the border we thought it was. Instead of Mexico or Argentina, it seems that he headed for . . . Massachusetts.

According to DealBook, Israel popped into a police station in Southwick, Mass., "near the Connecticut border," to turn himself in. He was talking to his mother on a cell phone at the time. No word on what he was saying, but "Hi Mom, I'm going to jail now" probably gets us pretty close.

Israel's disappearance was the subject of much speculation. His SUV was found near a bridge that spans the Hudson River, with the words "suicide is painless" written in the dust on the hood. But the police figured out pretty quickly that the implied suicide was a fake and arrested his girlfriend as an accomplice in his plot to escape prison. Soon after, a photograph of the ratty camper Israel was apparently living in was circulated in the press.

We now know he didn't get very far in that old camper, less than a hundred miles. Was it the cost of gasoline and the lousy mileage of that big V-8 engine? Maybe when Israel was setting aside the escape money he knew he would eventually need, he didn't realize that gas would cost so much in 2008. I suppose high gas prices are hurting everyone these days, even high-flying, big money charlatans like Samuel Israel.

Once upon a time, the minivan saved Chrysler. In 1984, the company introduced this new type of vehicle which went on to sell by the millions, helping Chrysler emerge from near bankruptcy.

But now Chrysler finds itself with too much production capacity for all kinds of large vehicles, including minivans. Today, the automaker announced that it will close one of its two minivan plants. The St. Louis South plant in Fenton, Mo., will close within the next four months; approximately 2,400 workers will lose their jobs. Minivan production will continue in Windsor, Ontario. Chrysler also announced that it will also produce fewer units of its 2009 Dodge Ram pickup truck. Only one shift will run at the St. Louis North plant, instead of the previously planned two shifts.

This news comes as news reports indicate that June auto sales plunged in the U.S. Consumers has deserted trucks and SUVs as gas prices soar past $4 a gallon. Chrysler famously produces a higher percentage of trucks in its lineup, and is suffering accordingly. Edmunds.com is estimating that Chrysler's sales could be down 30% in June. Cerberus Capital Management, the private equity firm that owns Chrysler, continues to say that it is happy with its acquisition of the company. But with results like this, it's hard to see how that could possibly be true.

U.S. futures indicate a mixed to lower opening Monday morning.

Oil prices continue to serve as a powerful market mover, as oil surged past the $143 mark in Monday trading on the ICE Futures exchange in London. On Friday, oil futures charged to a record $142.99 before closing at $140.21.

Inflation in Europe rose to 4% for the month of June, higher than the estimate of 3.9%. Higher inflation comes even as economic growth is slowing, and makes an increase in interest rates by the European Central Bank more likely.

The U.S. Federal Reserve, however, is less likely to respond to higher inflation with a rate hike. Accordingly, the dollar continues to weaken as traders continue to move into the euro and yen.

Some analysts are now saying that the current market will likely resemble the 1974 bear market before all is said and done. Higher inflation and lower liquidity show no signs of changing direction, and the main question now is how long the bear market will last. Some pessimists are saying it could be a decade.

In stock news, Carl Icahn is planning to file a definitive proxy in his battle for Yahoo! Inc. (NASDAQ: YHOO) this week. The proxy should inform investors of just how far Icahn wants to go in shaking up Yahoo!'s management. For those wishing to keep up with Icahn's latest moves, be sure to check his blog regularly.

This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

Is there any piece of furniture more classically American than the La-Z-Boy recliner? It goes hand in hand with the image of Dad -- any Dad, all Dads, from the 1950s to today -- enjoying the simple pleasure of sitting with his feet up and his head back, tempting sleep as he reads the paper. After a long day at work but before the wife puts a delicious roast on the table, there's always time to relax a bit in the world's most famous comfy chair.

La-Z-Boy (NYSE: LZB) invented the first version of that iconic chair in 1929. The company got its start a few years earlier when two cousins, Edward M. Knabusch and Edwin J. Shoemaker, founded the Kna-Shoe Manufacturing Co. in Monroe, Michigan. They made furniture and cabinets in the proverbial start-up garage, and they has some initial success, especially with new designs like the Gossiper, a bench with a phone stand built in. But competitors kept stealing their designs and their profits. So when someone suggested that they upholster their popular wooden recliner, they proceeded carefully, filing for patents and choosing a distinctive name. Sit-N-Snooze and Slack-Back were in the running, but La-Z-Boy was the name they finally selected for the world's first reclining upholstered chair.

The La-Z-Boy was a huge hit, although it hadn't yet achieved its truly classic form. That occurred in 1953, when the Otto-Matic model was introduced. The long-running problem of the ottoman, a separate piece of furniture needed to support the feet while relaxing in a comfy chair, had now been solved. From now on, the ottoman was rendered superfluous, since the La-Z-Boy could offer a built-in foot rest. Oh, sweet perfection!

This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

Ah, Spam. Doesn't the word make your mouth water? Or maybe not. Either way, Spam must be given its due. It is the most famous of the mystery meats, those exciting concoctions of the meat-packing industry. It has been sold by the billions of cans since its invention in 1937. It helped feed the Allies and win World War Two. It is central to a Monty Python skit about Vikings in a greasy spoon, and now a Broadway musical. It provides a name for unwanted e-mail. It theoretically lasts forever. And it is a product of the Hormel Foods Corporation (NYSE: HRL).

Spam is made in several places, but its ancestral home and main production facility is in Austin, Minnesota, sometimes called Spam Town. Austin is the small town south of Minneapolis that is home to Hormel, proud maker of all things Spam. (I should note that Hormel would prefer that we write "SPAM luncheon meat" but I don't think we'll take that suggestion too seriously.)

Hormel has long dominated the town of Austin, and not just because the Spam Museum is located there. It is by far the largest employer in town and the majority of workers in Austin work for Hormel, producing many of the company's meaty foods. Hormel's roots in the town go deep. Drawn by the town's good rail and river access, George A. Hormel opened a meat packing business there in 1891, and his small company eventually grew into the billion-dollar colossus that today owns a dizzying array of food brands, from Chi-Chi's and Valley Fresh to Dinty Moore and, of course, Spam. (Does it seem fair that one company gets to own both Dinty Moore and Spam?)

This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

Few companies are as strongly associated with their hometowns as L.L. Bean, which has been producing outdoor clothing, sporting goods, and brightly colored preppy wear in Freeport, Maine, since 1912. The company's first product, the iconic rubber boot called the Maine hunting shoe, was manufactured in Freeport, and quickly became a big hit despite the fact that most of the first boots sold were returned due to a design defect.

In the past 95 or so years, both L.L. Bean and Freeport have come a long way. The company store, which began in a basement, grew significantly over the years, despite the fact that most of Bean's $1.5 billion in annual sales come through its ubiquitous mail-order catalog. The store has been open 24 hours a day since 1951, with a few exceptions for the deaths of John F. Kennedy and the founder, Leon Leonwood Bean.

Today, the company dominates the very small town of Freeport, population 7,800. It's much more than just a store, as its multiple buildings, parking lots, and outdoor patios and sculptures define the town itself. L.L. Bean has become more of a campus than a store, with different buildings for clothes, hunting and fishing gear, bikes and boats, and a discount outlet, as well as outdoor spaces dedicated to demonstrations of equipment and live musical performances.

The bad news just keeps coming for General Motors (NYSE: GM). The beleaguered auto giant has announced that it will offer 0% financing to help get rid of its growing inventory of inefficient trucks and SUVs, even as it is forced to raise prices due to higher raw material costs. Its once proud Hummer brand is now an albatross that the company is considering unloading. And its market cap of $7.5 billion is lower than not only Toyota (NYSE: TM) but also ailing Ford (NYSE: F) -- GM has lost so much value that a writer at CNNMoney is making the argument that it should be removed from the Dow Jones Industrial Average.

One bright spot for GM has been the Chevy Volt, a hybrid car that has generated considerable excitement in the automotive press. The design of the car is groundbreaking, with a large battery that is recharged by a small gas engine. This is an advance over the popular Toyota Prius and other hybrids, which are essentially gasoline-powered vehicles that use batteries to improve mileage and emissions. With the Volt, scheduled for production for the 2010 model year, GM could claim a real technological advance for the first time in years, and maybe regain some market share.

But there's only one problem: it is highly unlikely that GM will be able to deliver the Volt as promised, according to an Atlantic piece about the car. The article is filled with fascinating details about the ongoing development of the car, especially the frantic pace and rapid innovation required to get the car into production shape. But an unnamed executive told the magazine that this is exactly the problem. The development process has been too compressed, which will force GM to either fail to meet its target date or, worse, to deliver an inferior product. As the executive put it, "They're making a huge mistake."

Like all processed food producers, Kellogg Company (NYSE: K) is facing rapidly climbing costs for corn, wheat and sugar, the basic building blocks for many of its products. Rather than passing those costs on to consumers in a straightforward manner by raising prices, Kellogg is taking a sneakier route: making some of its cereal boxes smaller while keeping the price the same.

Starting this month, Kellogg will shrink the size of boxes of Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks by an average of 2.4 ounces.

Of course, using this approach is in the end the same as simply raising prices. The key is price per ounce, which goes up whether you reduce quantity or increase price. So although you will pay the same price for a box of these sweet cereals, the per ounce cost of a corn syrup high in the morning will go up.

Even though reducing ounces per box amounts to a price increase, smaller boxes have a different psychological effect than adding a few pennies to the retail price. Food companies use this approach in the hope that most consumers won't notice, and research suggests that this is in fact true.

I suppose this means that most shoppers don't look at the per ounce cost when buying things like cereal. When it comes to inflation, maybe ignorance really is bliss.

They say that when one door closes, another opens. Well, it looks Eliot Spitzer, the disgraced former governor of New York, is going to put that idea to the test.

Word is that Spitzer is now thinking about starting an investment fund focused on distressed properties. With the housing bubble continuing to deflate and more people losing their houses every day, there certainly should be plenty of opportunities.

Of course, real estate is in Spitzer's blood. His father, Bernard Spitzer, is a New York City real estate mogul, worth an estimated $500 million. Rents in some of his buildings on Fifth Avenue are reported to be in the $50,000 range -- and that's per month. Even so, Eliot Spitzer has been quoted as saying that he wants "to take his father's real estate company to the next level."

It's not hard to imagine that Spitzer must have some pretty complicated motivations. He has a lot to make up for, and maybe by making a lot of money, even more than his father, he'll be able to redeem his name and his professional standing. He is rumored to have met with labor officials to discuss investing in the fund, so some of the profits might actually help some average working Americans rather than just the usual multi-millionaires. That would be quite a feat in itself.

And maybe by achieving a great success in real estate investment, Spitzer can redeem himself in the public eye. For now, it's impossible to mention Spitzer without searching for a punchline about high-priced hookers. Success with cheap houses may offer Spitzer a way out of that embarrassing situation.

Samuel Israel III founded the Bayou Hedge Fund Group in 1996. Within a few years, the hedge fund was deep in the red, and Israel and some of his associates came up with a novel way to deal with their problem: they created their own auditing firm and promptly gave themselves a clean bill of health. Making profits is easy when you cook the books, and Bayou cooked with the best of them, long and well enough to keep the criminal enterprise going for several more years.

Eventually, Israel was caught and Bayou went belly up. Some estimates put the total investor loss at more than $450 million. Last April, Israel was sentenced to 20 years in prison, and he was to begin serving that time today. But ABC News is reporting that Israel failed to show up at prison. His SUV was found near a bridge that spans the Hudson River, with the words "suicide is painless" written in the dust on the hood. But no body has been found and no one saw him jump.

Somehow, I have trouble imagining a thief of such epic proportions killing himself. Escape at all cost seems a more likely pursuit. I suspect that a careful review of all passengers getting onto planes to Buenos Aires or Bangkok today might just yield a former hedge fund manager trying to pull off one more scam.

This post is part of a series on some of the most memorable companies that have disappeared.

The story of Trans World Airlines is the story of American capitalism in the 20th century. Founded by aviation pioneers and scrappy entrepreneurs, TWA became one of the largest and most successful airlines in the world. It racked up numerous awards and distinctions and created a devoted base of customers and employees. Along the way, it also displayed the twisted corporate history typical of capitalism American-style, with plenty of buyouts and mergers and awkward transitions. Finally, it ended up the victim of vulture capitalists, who picked it clean and sold its carcass to a competitor. All in all, a heckuva ride.

The company got its official beginning in 1930, when Transcontinental Air Transport and Western Air Express merged to form Transcontinental & Western Air (T&WA). The merger was driven by one of the great motivators in American free market capitalism: the pursuit of lucrative government contracts. In this case, the contracts were for airmail transport and the new airline was soon rolling in federal dough, though not for long. The great Air Mail Scandal of 1934 brought an end to that arrangement and the airlines split up, although the name lived on.

From 1930 forward, TWA experienced some dramatic ups and downs. After a TWA crash killed Notre Dame coach Knute Rockne in 1931, the airline nearly went out of business. It survived though and went on to pioneer the use of many of the great aircraft of the 20th century, including the first (and only) DC-1, the Boeing Stratoliner, and the Lockheed Constellation. TWA also built some beautiful buildings, including the famous terminal at JFK in New York designed by Eero Saarinen. And TWA gained some noteworthy owners and managers along the way, most famously the reclusive though aircraft obsessed Howard Hughes, who lost control of the airline when his effort to upgrade to jets in the 1950s hit some financial turbulence.

The big news just keeps coming in the global auto industry, and today it's about an unprecedented event in the American market: for the first time ever, the Big Three were outsold by their Asian rivals.

That's right -- Asian manufacturers now sell more cars in the U.S. than American ones do. The numbers look like this: in May, the Big Three -- General Motors Corp. (NYSE: GM), Ford Motor Company (NYSE: F) and Chrysler -- had a market share of 44.4%, while ten Asian automakers beat them easily with 48.1% of the domestic market.

The other big news helps explain the first: a sedan was the top selling vehicle in May. This hasn't happened in 16 years. The vehicle models involved make the reason obvious: the thrifty and efficient Honda Civic (NYSE: HMC) outsold the long-time leader, the large and low-mileage Ford F-150. And the Civic was not alone. The F series trucks, whose sales plunged 33%, were also outsold by the Honda Accord and two other cars, Toyota's (NYSE: TM) Corolla and Camry.

How low can Detroit's market share go? With $4 a gallon gas here to stay, we'll have plenty of time to find out.

The bad news keeps coming for Ford (NYSE: F).

Today, the company announced that sales in the U.S. were down 15% in May. Not surprisingly, low-mileage pickup trucks and SUVs led the way. Sales of the F-150, Ford's bread and butter profit machine and its top-selling vehicle for over 30 years, dropped a whopping 31%.

Ford's miserable sales numbers come as Detroit neighbor General Motors (NYSE: GM) announced that it will close four truck plants and maybe even sell its Hummer division.

Both Ford and GM seem to finally be recognizing that their preferred approach to making and selling vehicles -- getting every penny out of their low-tech, low-mileage trucks while avoiding the engineering costs and difficulties of making high-tech, fuel efficient cars -- is finally hitting an immovable wall. Ford's marketing chief, Jim Farley, said that Ford is witnessing "the most dramatic shift in customer segmentation" in decades as consumers move away from trucks. He called May "a watershed month" and claimed that the auto industry is just "catching up with the breathtaking choices that customers are now making."