LOS ANGELES -- Isuzu Motors America may be sailing through a severe financial storm and taking on water, but it's in no danger of sinking, the company's new COO has assured key managers.
In a routine letter sent June 5 to zone managers to describe incentive programs, COO Terry Maloney added this line: "We are not going out of business."
Maloney was named COO in April amid a reorganization of the U.S. assets of struggling Japanese automaker Isuzu Motors Ltd., in which General Motors has a 49 percent stake. Isuzu's U.S. light-truck sales, which averaged 101,000 units in 1999 and 2000, dropped 16 percent in 2001 and were off 48 percent through May 2002.
That puts it on pace to sell only some 50,000 units this year.
Adding to its problems, Isuzu last week announced the recall of 161,927 Rodeo and Amigo sport-utilities from the 1998 model year to repair antilock brake systems that take too long to stop the vehicle. Likewise, Honda Motor Co. had to recall 52,934 Passports, which are rebadged versions of the Rodeo.
Maloney, who has not made himself available to the news media, is believed to be working through Isuzu's problems behind closed doors.
Some industry watchers speculate that Isuzu's reorganization plans are aimed at appeasing GM.
"They're just poising themselves to become a General Motors division," said Todd Turner, president of Car Concepts, an analyst firm in Thousand Oaks, Calif. "They're losing themselves as an independent brand."
GM has questioned openly whether Isuzu should be in the light-truck business. The Japanese company also manufactures diesel engines and commercial vehicles.
As recently as March, Isuzu had expressed confidence in a turnaround plan based on adjusting trim levels, vehicle colors and price points.
It also shifted its advertising message, stressing its vehicles' value and the company's standard 10-year/120,000-mile limited powertrain warranty.
The company gets a new flagship sport-utility in November to replace the aging Trooper. The Ascender, essentially a rebadged Chevrolet TrailBlazer EXT, is expected to bring in 16,000 sales annually. That compares to about 9,000 sales per year for Trooper.