By on June 1, 2012

After four years in the reds, Mazda is trimming its workforce. Mazda will cut a quarter of its sales management staff in Europe and the U.S., in the current fiscal, The Nikkei [sub] heard while checking up on a press release outlining organizational and personnel changes at the Hiroshima carmaker.

With most of its production in Japan, Mazda takes the brunt of the high yen. Mazda is left with the decision whether to sell its cars at a loss, or make them uncompetitive.

According to The Nikkei, Mazda will reduce U.S. staff by 20 percent to around 550 workers. In Europe, the staff of Mazda’s German subsidiary will be cut by a third to just under 200 workers.

No staff cuts are expected at home in Japan. Staff of the Tokyo and Osaka offices will be asked to move to Mazda’s head office in Hiroshima, which usually involves some people leaving because they don’t want to go.

 

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21 Comments on “Losses At Home Make Mazda Trim Workforce Abroad...”


  • avatar
    gslippy

    No surprise here; they’re doomed in the US.

    • 0 avatar
      DeadWeight

      Although I don’t believe this is inevitable, there’s no question that, just as VW has figured out, in the U.S., plain vanilla rules the sales volume day (as VW goes Toyota, and Toyota goes more Toyota).

      It’s entirely possible for Mazda to turn their situation around, but they’re going to have to ‘out Hyundai’ Hyundai (good quality and great fuel economy at a lower than the competitors’ price points with a great warranty) to do so at this point and in this economy, with the stubbornly high yen is throwing up a major obstacle on that pathway.

      Mazda is going to need a falling yen and/or production facilities (for both parts and assembly) outside of Japan in order to implement a successful long term plan towards profitability.

      • 0 avatar
        jandrews

        Mazda has no way of out-Hyundai-ing Hyundai. The Yen’s current exchange value simply makes that impossible.

        Mazda needs a partner. They make interesting cars and have a lot of good tech and R/D talent. I would hate to see them go and am surprised no large conglomerate has made a move to absorb them yet. Maybe they’re waiting for the fire sale?

    • 0 avatar
      icemilkcoffee

      Not true at all. Their Skyactiv Mazda3 and CX5 have gotten to a strong start. As the article said their main problem is their japanese manufacturing and the strong yen at this point in time. If they could shift production to North America they have a good fighting chance.

  • avatar

    Does it say anything on the new Mexican plant?
    http://www.businessweek.com/ap/financialnews/D9NTL3A80.htm

    Saludos

  • avatar
    redav

    Are they still on track to get back into the black by next year?

  • avatar
    ciddyguy

    I think their biggest issue is relying on Japan for most of their manufacture ring needs.

    It’s sad, but until they can break free of that mind set, they may well be doomed.

    I know their cars sell as I see Mazda 3’s all over Seattle and they may well be popular elsewhere too and not only do I see the 3, but 6’s and their SUV’s and their 5 too.

    Plenty of Proteges still roaming the streets as well.

    Shame as I now know the “cult” of Mazda with my little Protege5 and hearing this saddens me.

    • 0 avatar
      redav

      They are in the process of building a plant in Mexico for the 2 & 3. I don’t think they *want* to keep production in Japan, but being so small, it just hasn’t made sense for them to build plants across the world. They only have a few hundred employees in the US (a good chunk of which are being laid off).

      There’s also talk about using Fiat’s excess capacity to build Mazdas in the US & Europe. That would be very good for them if it happens.

  • avatar
    OldandSlow

    The main stream car market in the US is appliance driven, not zoom, zoom.

    Over the past decade Mazda has been trying to make a go of it in a niche that VW has started to give up on – the image of a driver’s car versus an appliance.

    Back in the days before Hyundai and Kia surged – Mazda was the brand that you’d consider after Nissan – if the offerings at your local Honda and Toyota dealer didn’t float your boat.

    Just 2 cent opinion of a Mazda owner – whose vehicle was built by Ford outside of Kansas City.

  • avatar
    stevelovescars

    I wish them luck with their new fuel efficiency improvements and hope they do well. The market would be a lot more dull without Mazda.

    I am a bad car flipper and the only car I ever kept for more than a couple of years was my 1991 Miata which I kept for 13 years. I also loved our Protege5 and my wife still hassles me to this day for selling it even though it was replaced with a Mazda5 with a manual transmission that she also adored. When it got smushed we immediately replaced it with another

  • avatar
    Pastor Glenn

    I still think, as a car-guy who is fond of Mazda (nearly bought several times – never have – but appreciate what they are as a company) – that Mazda should truly consider consolidating with Mitsubishi and Suzuki as well as Isuzu.

    Isuzu would obviously be medium and heavy diesel trucks (and any SUV businesses left such as Thailand etc would be re-badged as one of the other brands)

    Mazda could retain the sporty nature of their offering and would obviously bring their new engine tech to the marriage, not to mention their Hiroshima HQ (the key thing being that it is far from Tokyo where radiation may cause issues later on…. if not now). The planned upcoming Mazda 6 could be used as the basis for the corporate mid-sized cars (including a replacement for the Galant).

    Mitsubishi could become the mainstream brand with some sporting and eco flavor – and could donate their Normal, Illinois plant to the cause, for NA production of whatever is deemed needed in addition to the plans for the plant now. (i.e. new Mazda 6 and Mitsubishi Galant – with the Galant reskinned to make them distinctive, yet sharing all hard-points to enable easy co-production).

    Suzuki could continue with their smaller car gig which is what they do well, but concentrate the brand in nations where lower cost cars are very popular. In North America, all Suzuki car dealers would overnight become Mitsubishi and/or Mazda stores. Sell some of the Suzuki vehicles under Mitsubishi or Mazda names (reskinned) in various markets. Retain the motorcycle, outboard motor etc. end of the biz with the Suzuki name.

    This would mean the company would have 3 dealer networks in NA (one being limited in scope as truck only).

    • 0 avatar
      jthorner

      They could call the combined company JMC, Japanese Motor Cars, in homage to AMC. AMC was assembled as a combination of struggling companies trying to survive by getting married. It almost worked.

    • 0 avatar
      icemilkcoffee

      I think marrying Mitsubishi would degrade Mazda’s brand without adding anything other than overlap. Now Suzuki could be an interesting proposition. Their offerings in the US have been lackluster, but their small cars have great reputations in Asia and Japan. Suzuki has a foothold in India too. Nowadays you need a foothold in these developing markets in order to survive.

  • avatar
    onyxtape

    The men in my family have always been Mazda fanbois. We bought an MPV in the mid 90s over what offerings Toyota and Honda had. It was the oddball at that time being the only van without a sliding door. With 2 young boys, someone was bound to smoosh their fingers in the sliding door anyways. The interior was well designed and finish quality was high. Can’t say the same, however, about the Tribute that was built in Kansas City. Complete tranny failure and a radiator blew up. Crappy turn of the century Ford product. Our Mazda 3 is always fun to drive. Not a rocket or anything, but felt like something with almost-3-series reflexes.

  • avatar
    carguy

    Mazda needs to start looking for partnerships to reduce costs and insulate themselves from the strong Yen. If all they do is cut some staff then they are doomed. Let’s hope the Fiat venture works out.

  • avatar
    magicbus1966

    Saab, meh. Saturn, meh. Pontiac, Suzuki and Mitsubishi sigh, but ultimately, meh. Mazda, Nooooooooooooooooooooooooo. :(

  • avatar
    mtymsi

    Until Mazda realizes that the U.S. market is appliances and not zoom-zoom they will always be a bit player here with dismal sales. Their sales numbers could be in the ballpark of Nissan, Hyundai-Kia almost overnight if they built mainstream appliances. Very perplexing as to why they can’t figure out this simple fact and continue along the zoom zoom path after decades of dismal results.

    • 0 avatar
      srogers

      I think that their only hope is to continue to pursue their zoom-zoom niche. If they start producing appliances, they have to compete directly with more established appliance builders like Toyota, Honda, Hyundai, etc.

      They have built boring cars in the past (and some consider the current 6 as one) and they get lost in the crowd. Look at how Subaru is growing market share by continuing to be “different”.

  • avatar
    jthorner

    I don’t see how Mazda can survive as an independent car maker. They have never gotten up to critical mass, and only survived the debacle that was the late 70s/early 80s thanks to the infusion of Ford money and expertise.

  • avatar
    chaparral

    Mazda probably sells as many cars per dealer as anyone else.

    In College Station, TX, we have a Mazda dealer.

    Their market share is HUGE – at least 10% of the cars on local roads are Mazdas. Everything seems to sell, but the 3 and CX-7 are disproportionately numerous.

    The problem is that I’ve got dozens of choices for a Chevrolet dealer in Houston. There are only 4 Mazda dealers. This leaves the Mazda dealer a long way away for most of us.

    There’s no reason the 3 and 6 shouldn’t sell as well as the Civic and Accord. They’re better cars.

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