Cost-Cutting at Mazda May Include Layoffs : Cars: Irvine-based importer’s U.S. sales declined 29% last month, and the yen’s strength is hurting margins. The company confirms 2 executives were let go last week.
Japanese car importer Mazda Motor of America, still hurting from sluggish sales and profit margins shrunk by the strength of the yen, is considering a new round of layoffs to help pare operating costs, a top company official said Tuesday.
“We are looking at a variety of options,” including restructuring and layoffs, said Jay Amestoy, vice president of corporate affairs.
The company on Tuesday reported a 29% decrease in U.S. sales during August.
Two of the company’s vice presidents, Michael Anzis, who oversaw internal systems, and Herb Clark, head of the parts and service division, were laid off last week, Amestoy said.
Ironically, it was the overhaul of Mazda’s parts division in the early 1990s--made possible in large part by improved computer systems in Anzis’ department--that boosted productivity and enabled Mazda’s U.S. operation to weather hundreds of layoffs in 1993.
One source said Tuesday that the Irvine-based importer and distributor of Mazda trucks and cars plans to cut about 100 positions from its national payroll this week. The company employs about 850, with 450 of those workers in Orange County.
Amestoy, however, said he had not been made aware of any target figure or even that a general layoff is planned.
Mazda laid off more than 400 people, including several top executives, in a massive reorganization two years ago that was prompted by the same conditions--the dollar-yen ratio and tough competition from U.S. auto makers. A strong yen--and Japan’s currency today is trading about 97 yen to the dollar--is particularly harmful to the U.S. operations of Japanese companies because it reduces the value in Japan of each dollar earned.
Mazda Motor of America’s 1993 layoffs were triggered by a 20% climb in the value of the yen against the dollar as the exchange rate in three months went from 125 yen to 100 yen per dollar.
Other Japanese car importers have also suffered. Cypress-based Mitsubishi Motor Sales of America laid off 50 middle managers in 1993, and Honda, Toyota and Nissan all have complained of falling profits or sales related directly to the strong yen in recent years. All of the Japanese auto makers have raised U.S. prices in an effort to revive flagging profits from the world’s major automobile market.
Mazda’s latest cuts, if they come, are likely to be limited to the company’s U.S. sales and distribution network, sources said.
Other Mazda operations in the United States include Mazda Research and Design, based in Irvine, and Mazda North America, a separate company that provides liaison between the Japanese parent and the U.S. operations. The joint Mazda-Ford manufacturing plant in Flat Rock, Mich., is owned by a separate company.
