Mazda Reports First-Half Loss

Friday, November 17th 2000, 12:00 am

By: News On 6

TOKYO (AP) â€” Mazda Motor Corp. said slower exports and a stronger yen left it with a loss in the first half of the fiscal year and disclosed plans to eliminate 1,800 jobs, or 8.6 percent of its work force, by offering early retirement incentives.

The smallest of Japan's five major automakers, Mazda said Friday it hoped to make the job cuts from its global work force of 21,000 by March 2001.

Mazda also said that by September it would shut down one of two assembly lines at its Ujina factory in Hiroshima in western Japan, shifting production to an unspecified plant in Europe operated by Ford Motor Co., which owns 34 percent of Mazda.

The closure was one of several restructuring steps the company said it plans to move back toward profitability.

The group lost 9.59 billion yen ($88.2 million) for the six months ended Sept. 30 in contrast to a profit of 13.2 billion yen in the same period last year.

First-half group sales fell 7.5 percent to 1.006 trillion yen ($9.24 billion) from 1.088 trillion yen as exports to North America and Europe declined.

It expects to record a one-time expense of 24 billion yen ($220.6 million) to cover the pension and retirement payments for employees who volunteer for the early retirement program, which President Mark Fields said will help the company reach the break-even point by the end of next year.

Financial markets cheered the news. Mazda's shares rose 6.1 percent on Friday.

Mazda, which has a few overseas manufacturing facilities, said shifting some operations to Europe would help offset the negative effects of the yen's recent gains against both the greenback and the euro.

When the yen strengthens, Japanese exports become more costly abroad â€” and thus less competitive. Foreign revenue, meanwhile, falls in value when converted into the Japanese currency.

Slowed economic growth in the United States and a strong yen will probably continue to hurt earnings, Mazda said.

The automaker said in the full fiscal year ending March 2001 it expects a group net loss of 49.5 billion yen ($455.13 million), versus a profit of 2.61 billion yen in fiscal 1999.