Isuzu Reportedly to Cut Staff by 25%, Shut Plant

Troubled Japanese auto maker Isuzu Motors Ltd. is reportedly planning to eliminate about a quarter of its work force over the next three years and close one of its three main domestic plants as part of a drastic overhaul plan, newspapers reported Saturday.

Isuzu’s plan would cut 9,000 of its 38,000 existing jobs, mostly through voluntary early retirement packages and a hiring freeze, the Nihon Keizai newspaper said. The nationwide Yomiuri newspaper carried a similar report.

The auto maker will also close its truck plant in the city of Kawasaki, on the southern outskirts of Tokyo, reducing its truck-making capacity by one-third, the Nihon Keizai reported.

Isuzu spokeswoman Yoshiko Shibata would say only that the company has too much output capacity at its truck plants and plans to cut costs by redistributing production among domestic and overseas plants.

“We do have to adjust to the current level of demand,” Shibata said. She declined to elaborate and would not comment on the newspaper reports. The company will discuss its cost-cutting plans when it announces earnings Monday, she said.

The reports came after Isuzu said it would shake up management in June, replacing its chief executive and naming a former General Motors Corp. officer as vice president. GM is Isuzu’s largest shareholder, owning a 49% stake.

Japan’s economic downturn has hit Isuzu hard. The company’s domestic truck sales have fallen by half in the last decade, and it has forecast a third straight year of losses.

Isuzu hopes to cut costs by working closely with GM parts suppliers while expanding sales of diesel engines made at a factory in Poland to its U.S. partner, the Nihon Keizai reported. It said the company hopes to reduce much of its estimated $8.3-billion debt and is considering selling its headquarters building in Tokyo.