|Isuzu Motors Ltd. results for fiscal first half ended Sept. 30, dollars in millions|
|Notes: Results are consolidated, meaning they include most subsidiaries. Results converted at exchange rate of $1=¥119.40, the rate prevailing Sept. 28.|
Forecasting that its North American sales will drop 20 percent between March 2001 and March 2003, the struggling truckmaker said it will eliminate 20 percent of its staff there, integrate its two U.S. subsidiaries into one and liquidate its U.S. finance arm to save $176 million in administrative expenses.
In addition, Isuzu, in which General Motors has a 49 percent stake, will launch new products to include diesel-powered sport utilities, advanced diesel engines and, with GM's sales support, commercial trucks.
"Our top priority is to rebuild the North American business," COO Yoshinori Ida said during the company's earnings press conference last week. He aims to return that business to the black by March 2003.
In the fiscal first half through September, Isuzu's operating loss in North America widened to ¥5.72 billion, or about $47.9 million at current exchange rates, from $39.1 million a year earlier.
Overall, Isuzu's consolidated, or worldwide, net loss widened to $197.3 million for the first half from $185.3 million a year earlier. Sales totaled $7.0 billion, up 14.6 percent. For the full year through March, it expects to post a net loss of $209.4 million on projected sales of $12.6 billion.
North American losses stemmed from weak sales of sport-utilities and the need for high incentive spending. Isuzu said it expects to spend $400 million on incentives in the fiscal year ending March 31, up from $325 million in the previous year, plus $130 million on ads and commercials, up from $90 million.
To reduce two shifts to one at its Lafayette, Ind., joint venture, Subaru-Isuzu Automotive Inc., Isuzu will transfer 220 employees out of the current 1,000 to partner Fuji Heavy Industries Ltd.'s production lines there by January.
Isuzu also will integrate its sales subsidiary, American Isuzu Motors Inc., in Cerritos, Calif., and Isuzu Motors America, Inc., in Plymouth Township, Mich., into one unit by early next year. Although it hasn't decided which subsidiary will absorb the other, an Isuzu insider said the Michigan unit probably would survive.
Isuzu also said it will liquidate its finance business, Isuzu Motors Acceptance Corp., in Buena Park, Calif., within several years. Restructuring of those three subsidiaries will cut 300 of the current 1,500 jobs by year end.
In May, Isuzu said it would cut 9,700 of 37,700 positions globally between March 2001 and March 2004. Now it is axing another 3,300 in the same period. That will bring its worldwide work force to 24,700, down 34 percent from the level of March 2001.
Isuzu also will accelerate its push into the diesel engine business. DMAX Ltd. in Moraine, Ohio, a joint venture with GM that started operations in July 2000, plans to produce 94,000 diesel engines in 2001, up from 9,000 units last year, generating between $21 million and $25 million in operating profit.
Ida also confirmed that Isuzu plans to begin building a diesel-powered Rodeo and Axiom at the SIA plant in 2004.