Top Executives Get Ax at Mazda : Autos: 175 jobs are cut at the Japanese manufacturer’s Irvine-based sales offices as the yen’s surging value batters imports.
IRVINE — The top U.S. executive at Mazda of America was among the 175 workers who lost their jobs Tuesday as the surging value of the yen and sagging sales continued to plague the Japanese auto maker.
Several other top executives also lost their jobs at Mazda’s Irvine based-sales arm. It was the second cutback in less than a year.
Clark Vitulli, executive vice president of operations and Mazda’s top American executive, lost his job Tuesday. Other executives who will be let go include: James Hossack, vice president, product planning; Robert Evans, vice president, parts and service; David Parmenter, director of marketing, and David Watson, vice president of logistics.
About 140 of the jobs to be eliminated are in Irvine, where total employment will fall to about 400 from 540. The cuts are expected to be concluded late this year.
The cutback is in addition to 200 positions slashed during a previous restructuring in March, shortly after Mazda scrapped plans for a luxury car division and pushed some corporate functions into its regional offices. Mazda’s corporate employment nationally will fall to about 900 from 1,300 in early 1992. Outplacement assistance will be offered to those who have lost their jobs.
“It doesn’t take rocket science to figure this out,” Mazda spokesman Jay Amestoy said Tuesday. “This is a global economy . . . (and) everyone is trying to reduce operating and fixed costs. It’s especially important for us to keep our pricing competitive. That means making the hard decisions about having to lay off people.”
Mazda’s U.S. sales have been “relatively healthy this year,” Amestoy said. “We’re about 5% behind last year at this point, which is pretty good in light of the economy. What makes it especially difficult for us is that the (strong yen) has increased the cost of doing business in the U.S.”
The layoffs are designed to produce lower operating costs “that translate to good value for our customers,” Amestoy said. “The only way to (cut costs) with the financial pressures we’re under is to lay people off.”
Mazda’s pricing has been hurt by the strengthening yen, which makes it more expensive to build cars in Japan for sale in the United States, Amestoy said.
In July, Fountain Valley-based Hyundai Motor America let go 30 employees at its headquarters. As with Mazda, the layoffs were driven by a restructuring designed to increase profitability.
Mazda’s earlier round of layoffs occurred after the company scrapped plans for its Amati luxury car division, which would have competed with Honda’s Acura, Nissan’s Infiniti and Toyota’s Lexus lines.
At the same time, Mazda cut some corporate staff positions as part of a decentralization that was designed to improve service to Mazda’s nationwide dealership system and, ultimately, to customers.
The restructuring announced Tuesday will have no impact on employment at other Mazda operations, including an Irvine-based research and development company and a manufacturing plant in Flat Rock, Mich., where Mazda produces pickup trucks, a sedan and a sports coupe.
Downshifting Sluggish sales and the dollar’s decline against the yen are forcing Japanese auto-maker Mazda to regroup. Total sales dropped 3% during the last three years and 6% during the first seven months of this year compared to 1992. The overall drop is attributable to a near 30% falloff in truck sales. Mazda sales 1988-1992: Cars 1988: 256,050 1992: 280,745 Trucks 1988: 93,287 1992: 57,938 Mazda Motor of America at a Glance Headquarters: Irvine Employees nationwide: 1,075 In Irvine: 540 Estimated layoffs: 175, including 140 in Irvine Number of dealers: more than 900 nationwide Also in Irvine: Mazda Research and Development of North America, developer of the popular Miata in 1989; employs 200 and will be unaffected by reorganization and layoffs Yen Vs. Dollar The surging yen makes it more costly to produce cars in Japan for sale in America. Number of yen one dollar will buy: 1972 360 1992 126 Aug. 19, 1993 101* * Lowest exchange rate since World War II.
Sources: Mazda Motor of America; Times reports; Researched by JANICE L. JONES / Los Angeles Times
