Sept. 7, 2009 – Yamaha reacts to slowdown

In the wake of a significant downturn in sales, Yamaha has announced a number of cost-cutting moves, including factory closures and possible production and workforce cutbacks.
Yamaha posted a net loss of $767 million for its first half, a nearly $1 billion difference from the prior-year period. Both a significant reduction of sales plus negative foreign exchange rates led to the losses.
Masato Adachi, president of Yamaha Motor Corp., U.S.A., said in a company press release that the loss “underscores the severe global market challenges being faced by Yamaha and many other companies, in many industries, worldwide. “Here in the U.S., we remain very confident in Yamaha’s brand, products and business operations,” Adachi said, “and are working diligently through the market’s challenges to prepare for future success.”
To return to profitability, Yamaha has made a series of cost-cutting moves, including:
Reducing its production facilities in Japan. Currently, the company builds its motorcycles, ATVs, snowmobiles and PWC at 20 parts processing and assembly units in 10 factories. Those factories will be consolidated into seven and the manufacturing units will be cut to 13.
Will lower its “break-even production” — the minimum amount of manufacturing required to break even in terms of earnings. The new break-even production figures will be 250,000 motorcycles and 140,000 ATVs and side-by-sides. In comparison, the company’s current manufacturing capacity is 500,000 motorcycles and 320,000 ATVs and side-by-sides.
Staff reductions. Yamaha has concluded it has “about 1,700 surplus positions” worldwide, including 600 in Europe and the United States. A company press release said it plans to reduce
a surplus of 1,100 positions in Japan by
reallocating personnel and improving workforce efficiency.
What about the workforce in North America? A Yamaha company statement said, “While we cannot predict the future, we believe that through our previous workforce reductions, attrition and the completion of our previously announced early retirement program, we will be at appropriate staffing levels by year end.”

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