Vice president of Marketing, Mazda Motor of Anaheim Inc.
Mazda Motor of America in Irvine has a brief but notable history in the United States with a string of firsts including introduction of the Miata convertible in 1990 and the decision in 1991 to purchase its trucks from Ford. But global recession has overshadowed sales and the company has slammed on the brakes. Since February it has slashed its payroll by 31% including the August layoff of its top U.S. managers. Jay Amestoy, the company’s marketing vice president, spoke with Times staff writer John O’Dell about the road ahead.
Mazda has been through a reorganization that cost nearly 400 people--including some top managers--their jobs this year. Is this symptomatic of problems specific to your company, or to the industry as a whole?
The industry. But Japanese auto makers in particular at this time are feeling extreme pressure from two sources. One is the global economy and the fact that Japan is in the midst of a strong economic downturn. And the other is that the yen has strengthened dramatically against the dollar. We’ve seen a 15% to 20% increase in the last six months, and that dramatically increases our costs of doing business here. We have been reorganizing the company over the past year to deal with that.
What do the changes mean for the consumer?
Better service. Until 1988, Mazda in the United States was two distribution companies--Mazda East and Mazda Central, which was actually headquartered on the West Coast. They worked pretty well, but we needed to unify into a national company, so in 1988 we put the two together and created Mazda Motor of America. We started to get things like parts and service into place as unified divisions so that we would have a consistent national image. And once those things were done it enabled us, long before these cuts began, to start looking at how we could put more decision making back into the hands of our regional people. The central focus of most car companies today is improving customer satisfaction, and the way you do that is to respond quickly to what your dealers need so you improve the service the dealer offers to the customer.
With this reorganization we are now able to ensure that our dealers can communicate easily with a regional office that can make decisions on the spot. The decision-making power has been put in the hands of our four regional general managers. That’s a big change.
From what?
In the past, regional managers would take problems from the field and come up through channels at corporate here in Irvine. By the time the decision was made, it usually took much longer than anybody wanted. It was a system that did not allow us to respond quickly.
What else can car buyers expect from Mazda now? Any chance you’ll move into factory-supported one-price selling?
No. We leave price pretty much to our dealers. We want to expose them to the possibilities of one-price selling, and we have a couple of very successful dealers who do it. We also have successful dealers who don’t.
One thing people will see is improved parts and service. With help from outside consultants we have dramatically improved the way we get parts to our dealers. We now have overnight delivery, which allows dealers to get parts quickly so customers don’t have to leave their cars for days at a time. In the showrooms, we have just announced a new sedan, the Millenia, that was designed for our (proposed Amati) luxury division. It will slot in between the 626 and our flagship 929, and this year we have a new compact pickup.
A pickup that sets a precedent, right? After years of selling Mazda-made compact trucks to Ford to sell here, aren’t you now buying the trucks you sell domestically from Ford?
Yes. Most of the underpinnings and the engine are Ford, but the sheet metal is ours, styled in Irvine by the Mazda research and development folks.
Ford owns 25% of Mazda. Has the tie helped you weather the “buy American” backlash against Japanese penetration of the U.S. auto market?
The two companies are very separate, and I don’t think most consumers realize how many products are shared. Few know, for instance, that the Ford Probe actually is built by Mazda and uses a Mazda-engineered drive train and chassis. And few know that the (Mazda) Navajo sports utility vehicle is built by Ford, and few will know that the new truck is largely based on Ford mechanics. So it doesn’t help that way. If you prefer a domestic car, you’ll go to a domestic dealership, and if you want an import, you’ll look at import dealers. But from a resource management standpoint it makes great sense. If you go to the guys who build the best trucks and get them to build a truck for you, it allows you to put more of your resources into other things. In our case, passenger cars.
Back to the reorganization. We haven’t seen any other Japanese importer go through a layoff at the top levels like this. Was it aimed at the people, or the positions? You got rid of several executive vice presidents and your No. 2 executive, Senior Vice President Clark Vitulli.
We eliminated that whole top level of corporate positions underneath the president. The goal was to streamline the company, but how do you do that if you continue to keep all of the senior managers in place? If all you do is downsize from the bottom, that means most of your support staff disappears and you are unable to do the job that needs to be done because all the Indians, if you will, are gone. We decided we could cut back from 14 divisions to nine, which meant a lot of consolidation. As part of what we did, some of the divisions that were reporting to the senior vice president and the executive vice presidents now report to regional vice presidents, and others report directly to the president. And it is important to know that the decision to make this dramatic change and to streamline the organization was very much a decision made in the United States, not Japan.
What we did shows how serious we are. This really did cut across all lines.
On the thinning of management ranks by other car companies. . .
“Chrysler has done it, and I frankly believe we will see some of our Japanese competitors take these very same drastic steps in order to remain competitive. I think we can expect it certainly in the 1994 calendar year, if not before.”
On Mazda’s future in the United States. . .
“We will continue to be a primary player in the U.S. auto market, as a U.S. auto maker with our factory in Michigan, and as an auto importer and distributor. If anything we will increase our presence in the U.S. market.”
On the U.S.-built versus import car controversy. . .
“Very few cars are made from parts built all in one country any longer. We are truly in an era of world cars now. Every auto maker doing business in this country, and that includes the Detroit auto makers, is an international company.”
