Isuzu axes a quarter of workforce

Isuzu president Yoshinori Ida: "We aim to improve our value by tightening our belt"

Isuzu, the Japanese vehicle maker part-owned by General Motors, is to axe one quarter of its workforce in a bid to regain profitability.

The auto giant revealed it is to shed 9,700 jobs over the next four years, after unveiling its second consecutive year in the red.

The firm will close a truck plant at Kawasaki, reduce by one third its supply network and sell its headquarters building in Tokyo in an effort to regain profitability this year.

The move follows a troubled period for the Japanese auto sector, which has in recent year sought support from US and European firms in pushing through company restructuring plans.

Mazda Motor, which is one-third owned by Ford, on Friday reported its worst-ever group net loss of 155bn yen (£902m) in the year to March

And figures on Monday from the Japan Automobile Manufacturers' Association (Jama) showed that the country's auto firms produced 756,713 cars last month, down 4.3% from April 2000.

Two weeks ago, Nissan reported annual profits of 331bn yen (£1.9bn), following a shake-up overseen by Carlos Ghosn, nicknamed "Le Cost Killer", who was installed by major shareholder Renault.

'V-Plan'

Isuzu blamed a loss of 7.4bn yen (£276m) in the year to the end of March on slack sales, heavy costs incurred by support dealers, and larger losses on investments than had previously been estimated.

But the firm said the shake-up would see it return to profitability in its current reporting year with 30bn yen (£175m) profits targeted for 2004-05.

"We call this mid-term plan the 'V Plan' not only because it stands for victory, but because it stands for v-shaped recovery," company president Yoshinori Ida said.

The firm also announced enhanced collaboration with General Motors, and plans to integrate Isuzu dealers into the GM network.

"We aim to improve our corporate value by tightening our belt and creating a global operation structure by working with GM," Mr Ida said.

Falling exports

Jama blamed the overall fall in output from Japanese carmakers in April, the fourth successive month of decline, on weak foreign demand.

"While domestic sales remained stable, falling exports dealt a blow to the overall output by Japanese automakers," association spokesman Satoshi Honda said.

"The drop in exports was due to sluggish demand in the US, European and Asian markets."

Mitsubishi Motors, the auto firm hit last year by a scandal over hidden complaints, was the worst performing Japanese carmaker last month, with output falling by more than one fifth, the Jama survey revealed.

Nissan also reported a double-digit decline, while, in truck production, Isuzu output plunged 22.6%.

But Isuzu topped with the carmakers' league, reporting a 7.9% rise in production, albeit to a modest 16,386 vehicles.

Only Honda among major Japanese vehicle manufacturers secured rises in output of both lorries and cars.