Mazda's N.A. unit still bleeding as company ponders Michigan plant's fate
Mazda CEO Takashi Yamanouchi: “Nothing has been decided yet” about the automaker's jointly operated plant in Flat Rock, Mich., where output has slumped to 45,000 units a year.
Photo credit: BLOOMBERG
TOKYO -- Mazda's unprofitable U.S. assembly plant is pulling the company's North American operations further into the red as executives ponder its fate.
Mazda Motor Corp. booked a loss of ¥8.5 billion, or about $102.6 million, for the Flat Rock, Mich., plant jointly operated with Ford, in the fiscal year ended March 31, CEO Takashi Yamanouchi said.
The charge worsened Mazda's operating loss in North America, its only region in the red.
"We had planned to produce 100,000 units there annually," Yamanouchi said today at the company's earnings announcement. "But we are only producing 45,000. We thought it would be difficult to get back to the planned output, so that's why we decided to write it off."
Mazda's regional operating loss for North America expanded to ¥31.7 billion, or about $382.6 million, in the fiscal year, from 19.3 billion, or about ¥$232.9 million, the year before.
Mazda is studying options to make the suburban Detroit plant profitable, including building a different model there. Pulling out also may be an option.
Asked if Mazda was considering pulling out, Yamanouchi told reporters "nothing has been decided yet."
Akira Koga, who will be the new executive vice president of Mazda Motor of America, said he could not comment on whether quitting the joint venture was on the table.
Mazda now produces the Mazda6 sedan at Flat Rock, and Ford builds the Mustang. Mazda planned to produce 100,000 units of the Mazda6 annually when the redesigned sedan was launched at Flat Rock in mid-2008. Then the financial crisis hit. Last year the plant built only 45,168 units of the Mazda6 and 77,586 Mustangs.
The factory is a big reason Mazda's U.S. operations are operating at a loss.
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