Mazda Motor announced Thursday that it would not renew the contracts of 500 part-time employees at its plant in Hofu, Yamaguchi Prefecture. This comes on top of 800 temporary staff who will not get new contracts at its other main plant, near Hiroshima.
The previous day, Isuzu Motors announced that it was terminating employment contracts with all 1,400 of its part-time and seasonal workers at its two domestic plants.
"It does not really come as a surprise," said Chikashi Okabe, an auto industry analyst at Credit Suisse in Tokyo. "Isuzu has increased its overseas shipments by 25 percent in recent years, but in the second half of this year they have declined.
"Up until a couple of months ago they were still trying to step up shipments overseas, but it looks very much as if things will be worse next year."
The news comes as General Motors, the world's largest carmaker, suspended production of passenger cars and pickup trucks in Thailand. GM and rivals Ford and Chrysler are scrambling for government aid in a bid to avoid bankruptcy as the economic slowdown hits demand for cars.
Mazda and Isuzu need to reduce fixed costs and production capacity, in much the same way as Toyota Motor has done.
Earlier this month, seven companies under the Toyota umbrella cut 2,900 staff. Toyota has slashed its earnings forecast by 73.6 percent, blaming the decline on the strong yen and slumping demand.
"Isuzu mainly supplies trucks to the Middle East, Latin America, South-East Asia and Africa, and companies in those countries are really struggling to raise the capital to buy these vehicles," said Mr. Okabe.
Source : Telegraph
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession]
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