Mazda Consolidation Likely to Cost Jobs, New Boss Says

The consolidation of Mazda’s North American operations is likely to come at the cost of more than 400 jobs--25% of the import car company’s total U.S. and Canadian employment--the company’s new top boss said.

“There’s no way to sugarcoat this kind of news,” Richard N. Beattie wrote in a letter to employees late this week. The former Ford Motor Co. executive was named earlier this year to direct the reorganization of Mazda’s North American operations.

As the fourth-largest Japanese car retailer in the U.S., Mazda has seen sales slip about 17% in the last year. It also has had major financial troubles at home. Last year, its bankers asked Ford, which owns 33.4% of Mazda, to take control.

Beattie said in the letter that he expects to use attrition, layoffs and the elimination of some open positions to cut Mazda’s current payroll of 1,650.

Mazda has four separate companies in the United States and a fifth in Canada. Beattie is consolidating them into one Canadian company and one U.S. company, both operating under an umbrella group he heads. The restructuring is expected to be completed later this year.

Sources said Friday that the company’s Southern California employment shouldn’t be hit hard in the cutbacks, though. Both the new umbrella group, Mazda North American Operations, and the new U.S. operating company--yet to be named--will be based in Irvine.

Currently, Mazda’s chief U.S. arm, Mazda Motor of America Inc., and its Mazda Research & Development of North America Inc. are based in Irvine. Most of the research company’s 210 employees work in Orange County and about half of Mazda Motor’s 800 workers are stationed at the Irvine headquarters. Mazda Motor is the company’s import, distribution and dealership development arm.

Other Mazda firms in the U.S. are Mazda North America Inc., a corporate liaison group with 435 employees, and Mazda Systems Services of North America Inc., a data-processing operation with 65 workers. Both are based in Flat Rock, Mich.

Mazda Canada Inc. in Toronto, with 140 employees, handles distribution and dealer development in Canada.

Beattie said consolidating the five firms into two “separate but fully integrated companies” to serve the U.S. and Canadian markets is the “first step” in a reorganization that will change the way Mazda does business in North America.

Part of that change will include Mazda’s efforts in the North American auto and light truck market. Analysts say they believe the firm will offer more vehicles based on platforms shared with Ford products.