Mazda Motor Corp. is reexamining its business to “accelerate further cost improvements,” Jim O'Sullivan, CEO of Mazda North American Operations, said in a memo sent to employees on March 7. Mazda has been reporting massive losses for the past four years and is now offering voluntary buyout packages to its American workers and as part of further efforts to reduce costs, there may be dismissals.
O’Sullivan said that Mazda is "in the midst of an extremely challenging business environment." This plan has been confirmed by Mazda spokesman Jeremy Barnes who said that Mazda has 701 U.S. workers. This announcement comes after the disclosure last month that its Japanese parent anticipates a net loss of 100 billion yen, or $1.2 billion, for the fiscal year that ends on March 31.
This will be the largest loss for Mazda in the last 11 years, mostly due to the impact of the strong yen. In the five regions of Mazda, just North America has reported a sales increase in the first three quarters of the fiscal year. Its U.S. sales are higher by 48% this calendar year until February. The memo stated further that this initiative will be done in three stages.
The first is a "voluntary" package that consists of separation pay, a lump-sum payment based on years of service, and assistance in landing a new job. Employees are required to apply by April 16. Mazda will make its decision by April 27 on which employees can get the package. There will also be a "redeployment process" that will restructure the organization, which will then have a smaller work force.
Beginning May 16, employees will be positioned in the new structure. With regards to “involuntary" separations, Mazda said that if there aren’t enough volunteers to achieve its cost-reducing aims, there will be some workers dismissed. These workers won’t receive the "enhanced benefits" that volunteers will receive. Mazda workers will start to know who will lose their jobs on May 29. [source: Autonews]