By on November 6, 2012

Late last night, we were contacted by an employee of American Suzuki Motors Corp, who reached out to TTAC to vent his frustrations regarding the downfall of ASMC’s auto business. The picture painted by this employee is one of a highly dysfunctional operation, focused only on tomorrow and never beyond that, a revolving door of Japanese management and deep antipathy for American workers.

Though we’ve confirmed the identity of this Suzuki employee, they wished to remain anonymous due to the sensitive nature of their remarks.

Over the course of our Death Watch, one of the most persistent claims that we’ve heard on background has been the appalling corporate culture that exists at ASMC. American workers were apparently mistreated by the Japanese managers brought in to run the company for a year or two, and had little investment in the success of ASMC.
According to the subject of our interview, it was worse than that.
“I have been here 5 years. In this time, we have gone though several regime changes. Most of the Japanese management lasted here about a year or two at most, then sent back to Japan for reassignment to other countries,.
“Here at Suzuki, us American workers are not to speak directly to them. We must go through our department managers. The Japanese do not make eye contact with anyone, even in passing in the office. Many of us American workers took this as a huge insult. I know I do.”
Observers have long criticized Suzuki for their lack of fresh product. Our insider paints a picture of a division starved for product and totally at the mercy of inept and weak management.
The latest and current group of Japanese managers were brought in back in May 2011. There sole purpose has been cutting costs and searching only to become profitable, by any means necessary. This lead to a huge lack of any marketing, advertising, or just general word of Suzuki products. 
American managers, who have been lucky enough to keep their positions, they mostly just agree with whatever the Japanese say, for fear of losing their positions. Anyone who seems to have an opinion other than what the Japanese have is either quickly shunned or later terminated during these layoff periods. They say nothing and just go along with whatever is the plan of the day…they do not have any say in product planning.
How it works is they place dealer orders early in the model year and hope that Japan agrees with these numbers. However, they have always been at the mercy of what SMC is willing to produce and ship to the United States.Most of their dealer network is starved for product and parts at this time, and has been for a while. 
Our insider identifies April 2008 as the begining of the end for ASMC’s car business. Rick Suzuki, chairman of ASMC, admonished the employees for not meeting the 5 year goal of selling half a million cars, despite record sales numbers at the time. Bonuses and raises were suspended, and layoffs were instituted until the division became profitable. The biggest hit for the automotive side seemed to occur on the marketing end
 By April 2009, we had laid off approximately 15% of our workforce. Layoffs occured in all divisions at that time.  By summer of 2010, ASMC had let go of most of their PR/Media Department, and hired Questus as a consultant. However, as you know, there have only been very limited advertising and marketing for most Suzuki products. They did produce a Kizashi Kicks campaign, but with minimal success. The public just didn’t buy a Kizashi was a competitor to higher end luxuy vehicle like Audi and Mercedes that they featured in these commercials and on the website. They did place a Super Bowl ad, but only in about 15 markets, mostly on in the Northeast. The Cash for Clunkers program did help sales at the time, but it was not deemed as a success here by the Japanese. There have been constant rounds of random downsizing since the first layoffs of 2009. Most occur every 6-12 months. Yesterday was the biggest round since April of 2009, with almost 70 people being terminated including the all automotive field representatives.
The Japanese consider us to be an automotive company first, everything else is secondary. However, most people can only remember the Samauri. They had no idea that we were even still in business as an auto manufacturer!  We only had a 0.02% market share here in America. The main reason was that no one knew us. I doubt today if anyone cares about the chapter 11 filing. Most are probably gonna say to themselves, “Suzuki made cars??”
When asked what Suzuki did right over the last 5 years, our insider was characteristically blunt; “Honestly…” he said “dropping the auto division.  He continues
The lack of management and communication here lead many employees to become hopeless about auto. The ones who worked hard and tried to make a difference were treated poorly by the Japanese as well as their immediate managers and either were later terminated or left on their own accord.
We should have an even better picture later on, with a eulogy from Suzuki Death Watch founder Mark Stevenson, where even more information from within ASMC will be discussed. It only gets bleaker.
This interview has been condensed and edited for clarity
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30 Comments on “Suzuki Death Watch 7: Inside The Horrible Dysfunction At American Suzuki...”


  • avatar
    Tosh

    Kizashi? Gesundheit!

    Where’s my Swift?!

  • avatar
    Sinistermisterman

    Having worked for a Japanese firm for a number of years, I’m amazed that this kind of attitude apparently still exists in a major Japanese corporation. Perhaps over 30 years ago us ‘Gaijin’ were treated like we didn’t know what we were doing, and that head office in Tokyo would overrule us on decisions or treat us with contempt, but that is definitely not the case today. I pretty sure there is more to this story than just Japanese managers cr*pping on the foreign employees.

    • 0 avatar
      jz78817

      I’m sure there’s more to the story, but having worked for two Japanese companies myself, I can say there definitely still is this kind of division. it wasn’t quite the same at both companies, but both clearly took the “we (Japan) are in charge here, and your job is to do what we say.”

      • 0 avatar
        Sinistermisterman

        Perhaps the firm I work for is a tad more international in its outlook (ship owner). While our Tokyo office does get the final say in a lot of things, they will often look to the overseas offices for local knowledge, constructive criticism and input in big deals.

  • avatar
    krhodes1

    I actually saw a fair number of Suzukis in my area, because we had a well-regarded Lincoln-Mercury-Suzuki dealer in town. But when Ford axed Mercury, they folded up and moved Lincoln into their Ford store 20 miles away, and simply abandoned Suzuki. Now the place is the biggest Enterprise rental facility you could imagine. Sad.

  • avatar
    28-Cars-Later

    “Rick Suzuki, chairman of ASMC, admonished the employees for not meeting the 5 year goal of selling half a million cars, despite record sales numbers at the time. Bonuses and raises were suspended, and layoffs were instituted until the division became profitable.”

    The beatings will continue until morale improves.

    • 0 avatar
      rnc

      wonder if “Rick” Suzuki and Joe Izusu are friends? However a local japanese company (I was offered the controllers job) actually uses the “Ribbons of Shame” stuff, office workers wear uniforms, HR manager with unlimited powers and 7 japanese executives who do not deal with americans (and I mean talk to them (they are here because thier customers (all other japanese companies) told them they had to be), what this person is describing is exactly what my background research turned up).

  • avatar
    rpol35

    “We only had a 0.02% market share here in America. The main reason was that no one knew us. I doubt today if anyone cares about the chapter 11 filing. Most are probably gonna say to themselves, “Suzuki made cars??”

    That was only part of the problem. The few that did know Suz was making cars for U.S. sale didn’t want what little they offered. A Kazashi is more like a cross between a bleedin’ garden tractor and an uninspired dog cart.

    So much for Japan Inc.’s admired business model.

    • 0 avatar
      rnc

      Japan Inc.’s admired business model is quite possibly a few stone throws closer to death than our own, full of companies that died long ago, but actually letting them die would kill the banks so its all been proped up by government debt since thier bubble burst in the late 80’s, rather than letting reality take it’s course. Sound familiar? And I don’t mean the bailout of GM and Chryco, I mean if the rules that existed 5 years ago still existed every TBTF bank, maybe with the exception of JPM, would be insolvent, but the ability to mark assets to fantasy along unlimited access to the fed window at 0% and the ability to buy treasuries at 3% and they’re making record profits (300% profit borrowing money that the treasury just makes up from thin air to buy debt from the treasury), seems all good and well I guess?

      • 0 avatar
        jz78817

        “Japan Inc.” rose by capitalizing on the existing competitors’ mistakes. as in, “this is what they’re doing wrong. This is how we’ll do it right.” Unfortunately, the competition is now- by-and-large- doing it right too. And “Korea, Inc.” is standing by to take their place.

    • 0 avatar
      imag

      Do you really think that all companies in Japan function on the same business model? Do you think all companies in the U.S. do?

      Suzuki’s model is not the same as that of Honda or Toyota or Nissan or Subaru or Mazda. Each of those companies varies dramatically in almost every aspect of their business. Quite a few of those companies taught US companies (even non-automakers) quite a few things in the last couple decades.

      So please, stop painting every Japanese company with the same brush. It comes across as naive at the best, and racist at the worst.

    • 0 avatar
      imag

      Do you really think that all companies in Japan function on the same business model? Do you think all companies in the U.S. do?

      Suzuki’s model is not the same as that of Honda or Toyota or Nissan or Subaru or Mazda. Each of those companies varies dramatically in almost every aspect of their business. Quite a few of those companies taught US companies (even non-automakers) quite a few things in the last couple decades.

      So please, stop painting every Japanese company with the same brush. It comes across as naive at the best, and racist at the worst.

  • avatar
    gslippy

    Sounds like an American car company, pre-1990 or so. How sad.

  • avatar
    racer-esq.

    I doubt that even effective management could have saved Suzuki in the US due to its cars.

    I actually considered a base Grand Vitara at one point, because a rear wheel drive, independent rear suspension, manual transmission unibody wagon with front and side airbags, AC, power windows and locks, and ABS for under $20K was a pretty sweet deal. But I passed on it because I knew the writing was on the wall for Suzuki. The place where I test drove it switched to full used cars about a year ago.

    But for the average buyer Suzuki had nothing. The SX4 gets horrible, awful mileage for compact, and looks goofy, and the Kizashi has a ridiculous name and cost as much or more than an also AWD Subaru Legacy.

    Management can be blamed for not brining in the Swift, which may have had a chance.

  • avatar
    Freddy M

    That’s a pretty damning account of their business practices and a shocking attitude to have for any of the manufacturers.

    Not personally going to miss Suzuki, but news of their demise certainly is noteworthy.

  • avatar
    cwallace

    Yeah, gut the marketing department, they don’t generate revenue anyway and it’ll help the books for a quarter or two… and then you’re never heard from again.

  • avatar
    SambucaChi

    I work for a major Japanese company here in the Midwest and what the Suzuki employee is describing is exactly how us “Gaijin” are treated at my company. The last batch of JP (Japanese) managers have really taken to not acknowledging any Caucasians below the rank of Manager. I, being the PR/Marketing Manager, can acknowledge them only if they speak to me first. If I want to see the new President I have to go through 2 assistants to get to his Admin for an appointment. I have been called many names, has items thrown at me and in general am disliked because I stick up for my direct reports. To answer the question that you are thinking, now that the economy is slightly improving, I am searching. In closing, there are many good Japanese Companies out there that get – “When in Rome, Do as the Romans”, sadly though, from my interation with many Japanese companies, the arogant behavior towards the Non-Japanese truly does exist.

    • 0 avatar
      gslippy

      And to think that I was shocked at Chinese citizens burning down Toyota dealerships.

      I can’t imagine putting up with such behavior every day, particularly while sitting in a US office.

      Good luck with your search; most companies aren’t like that.

      • 0 avatar
        Acubra

        A. The Japanese-Chinese relationship is very different – on most accounts. The Japanese do not consider the Chinese “gaijin” to start with.
        B. The Chinese (and Koreans to that matter) are even worse – read, more chauvinistic.

  • avatar
    icemilkcoffee

    Ultimately it’s product mix that failed. They simply have no compelling product. Or even competitive product. Their lineup is about as forgettable and regrettable as Daewoo’s.

    I don’t think it’s the ‘japanese managers’ or corproate culture. Their motorcycle division still selling- because their GSXR 600-1000, Veestrom, DRZ400SM, are still compellnig products. (They should be hung by their toes for dropping the SV650 though).

  • avatar
    dima

    I guess Kazashi can be had for chip. I personally like this car, but not what they are asking for. 1/4 of the original price for 1-year-old sample will do.

  • avatar
    prabirmehta

    I have a connection to Suzuki in that I watched Suzuki invade the Indian market with “futuristic” looking small cars in the early 1980’s. Their arrival decimated the domestic manufacturers at that time – Hindustan Motors, Premier Automobiles and Standard Motors that were still manufacturing cars first built in the 1950’s. My family owned several Maruti Suzuki 800’s (800cc) and one Suzuki Esteem. The cars were vastly more comfortable and reliable that what we had been used to.

    I have driven the Swift in India and I feel that it could have given sub-compact cars here a run for their money.

    I bought a Suzuki Grand Vitara in the US, 3 years ago and it has been very reliable and great value for money (bought used). I sold the Grand Vitara on Saturday and learned of Suzuki North America’s bankruptcy on 2 days later. Sad to see Suzuki mismanaged to a point that they had to leave the US.

  • avatar
    ranwhenparked

    If this is at all true, it’s really quite shocking that a company could operate like this in 2012.

    This is like the sort of thing you heard about happening in the ’70s/early ’80s, but I really though this management model had been thoroughly discredited among the more successful Japanese companies.

    If this is true, and company-wide, then it doesn’t speak well of Suzuki’s prospects globally. They may be strong in places right now, but this sort of dysfunction is going to catch up sooner or later.

    • 0 avatar
      Steve65

      Wasn’t too long ago that there was a story right here about an organized ransacking of a Suzuki factory in India, by the employees. I said then and I’ll say again that something like that doesn’t happen unless the company is in an EXTREMELY adversarial relationship with their employees.

      I still like their cars but I’m begining to seriously dislike the company.

  • avatar
    oldyak

    one less Japanese car maker here….
    No big loss!
    The Koreans are taking the market anyway.
    Probably wont be the last!
    I can see Mitsubishi the next to go and then Subaru.

    • 0 avatar
      rpol35

      I would agree with you except that I think Mazda will disappear (at least from U.S. shores) long before Sabaru. Sabaru has nicely created a niche for themselves; I wouldn’t say a cult exactly but they have a lot of loyal buyers and their share is holding up. I believe that Mazda’s disassociation from Ford will make it more difficult for them to fend off Toynisonda & Korea.

  • avatar
    bomberpete

    Subaru is backed by Toyota and they’re not going anywhere.

    I agree that Mazda’s long-term prospects aren’t good.

    But my money is on Mitsubishi Motors USA to go muerta. If their USA level of dysfunction still exists like it did when I did, they’re doomed. They’ll get out of here once they figure out what to do with the Normal, IL plant.


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