TOKYO -- When financially strapped Ford Motor Co. sold its controlling stake in Mazda Motor Corp. in 2008, Mazda executives trumpeted the company's release from U.S. ownership.
Ford had been Mazda's white knight in its time of need. Now the tables had turned. Ford was the one mired in losses and was dumping its shares in Mazda and other companies for badly needed cash and to refocus on its core operations. After 12 years of Ford-appointed top management, Mazda had returned to self-rule.
But the sweet taste of freedom turned bitter.
Today CEO Takashi Yamanouchi's small, export-reliant company faces a fourth straight year of losses, including an expected shortfall of ¥100 billion, or about $1.22 billion, in the fiscal year that ends March 31. It suffers from slumping sales, a misaligned global manufacturing footprint and soaring r&d costs.
This month, for the second time in just over two years, Mazda is resorting to a massive equity share sale to raise the money to fix its structural problems and fund the advanced technology it needs to compete against bigger rivals.
Leading the fight is Yamanouchi, 67, who in 2008 became the company's first CEO of the post-Ford era. The soft-spoken former purchasing executive has a detailed revival plan that aims to return Mazda to profit next year.
It aims to cut costs, reduce the company's exposure to the yen's erratic swings and boost sales sharply. In four years Mazda wants to sell 1.7 million vehicles annually worldwide, up 36 percent from the 1.25 million predicted for the current fiscal year.
Mass-market Mazda sells fewer vehicles per year than BMW, without the German high-end marque's high prices and hefty profit margins.
And Mazda is again courting partners for projects.
"Mazda is currently undergoing a spectacular structural transformation encompassing r&d, production, sourcing, sales and all other business areas, for the first time in its 90-year history," Yamanouchi, a 45-year Mazda veteran, said.
"It's a must-win situation. That's how important it is."
The pragmatic CEO is not afraid to kill sacred cows. Last June he suspended Mazda production indefinitely at AutoAlliance International, its Flat Rock, Mich., joint assembly plant with Ford -- and a symbol of their partnership since 1985 -- because the low-volume Mazda6 sedan made there was losing money. Mazda said importing the Mazda6 from Japan instead would save Mazda $182.3 million a year. Mazda has left the plant in limbo, not saying whether it will build another vehicle there.
"Reviving this would be difficult even if we tried," Yamanouchi told reporters before pulling the plug on the Mazda6 at Flat Rock.
Reviving the whole company won't be easy either. Yamanouchi's blueprint affords little room for error. And analysts warn it may be too little, too late to stay independent and profitable in an industry in which size increasingly matters and every carmaker has to invest heavily to meet increasingly stringent fuel-economy rules.