Mazda Directors Take 10 Pct. Pay Cut

Tuesday, February 6th 2001, 12:00 am
By: News On 6

YOKOHAMA, Japan (AP) — Mazda Motor Corp. directors will take a 10 percent pay cut in sympathy for the 1,800 workers being asked to take early retirement next month, Mazda president Mark Fields said Tuesday.

Mazda, 33.4 percent owned by Ford Motor Co., has been trying to trim its work force for years. Last year, the Hiroshima-based automaker said its was cutting its work force of 22,000 employees by 8 percent through voluntary retirement by white-collar workers.

Fields said the directors' pay cuts were designed to show that the 25 board members were doing their part ``in taking painful action as the rest of our company.''

Previous attempts at cutting jobs have not been effective because people did not volunteer to quit. But this time, several hundred workers have already agreed to retire, said Hisakazu Imaki, senior managing director overseeing business logistics.

Layoffs are frowned upon in Japan because of a longstanding ``lifetime employment system,'' in which workers are guaranteed jobs for life in return for being loyal to their employer. It is unclear whether Mazda will be able to meet the goal of shedding 1,800 workers, as generally no one can be forced to quit.

Fields — who invited reporters to see models in the works at Mazda's research facility in Yokohama, near Tokyo — refused to say what he would do if workers don't volunteer to retire.

The biggest problem for Mazda is the lack of hit models, said Toru Shimano, auto analyst with Okasan Securities Co. in Tokyo.

``They might succeed in making their business more efficient, but what they really need to do is sell cars,'' Shimano said.

Mazda is forecasting 49.5 billion yen ($430 million) in losses for this fiscal year ending next month, largely because of restructuring costs. The plunging euro has also hurt Mazda's revenue from European sales.

Mazda sales last year grew slightly in the United States but fell in Europe and Japan. Mazda has said it is closing one of two assembly lines at its Ujina factory in Hiroshima in western Japan, shifting production to Europe

Fields said Mazda was determined to embark on a new ``growth strategy'' that will strengthen its brand image as a carmaker with a heritage such as the rotary engine to drive home the message that Mazda cars are fun to drive.

Mazda officials said the company's collaboration with Ford would help cut costs by sharing development costs, working together in purchasing parts and gaining an edge by adding to sales volume.

David Thomas, senior managing director in charge of global marketing, said Mazda had in the past tried to offer too much.

``We are still a relatively small global company. Yet we have been acting as a big company,'' Thomas said. ``Our products have not truly reflected, each one of them, what Mazda's core spirit is.''

Besides showing a subcompact, sedans and RX-8 planned for next year and the year after, Mazda displayed the ``MX Sport Tourer,'' a concept car that runs on a hybrid system combining an electric motor with a gasoline engine and comes with a retractable roof window. There is no commercial plan for making the car yet.