Mazda sneezes and thousands catch a cold

Mazda's worldwide production fell by 41% in December last year and despite a strong first half of the year, domestic production slumped by over 42%. Mazda stopped night shifts at its Ujina and Hofu plants and both plants will also be closed on Fridays in February and March. The company is also being hit by the strong yen and it looks like it will post an operating loss for the year.

When a large car manufacturer runs into the trouble, knock on effects spread wide and hit hard. Many small companies rely on supplying Mazda with parts, and are the first to feel the squeeze in a recession. Kure based parts maker Takiguchi is the first casualty. The company which had been laying off employees since last November, has told the remaining 40 workers they were shutting down and that there would be no compensation or redundancy package.

These sub-contractors employ a large number non-Japanese guest workers. Many of these workers have no work insurance and are often supporting families here and back in their home countries. Kaita city which has a considerable nikkei population recently held a seminar for foreign workers concerned about the precarious employment situation, to which 400 people turned up. The town is offering special Japanese classes for out of work non-Japanese in an effort to improve their employment prospects. Non Japanese workers are not the only ones feeling the pinch. A January 30 local TV news reported that the according to the Hiroshima Labor Bureau, the number of temporary workers who had had their contracts terminated exceed 3000 as of January 23 (Japanese report here).

Following the lead of Hiroshima Prefectural and Municipal governments, large local companies are declaring their intentions to support the local economy by boosting their fleets with Mazda vehicles. Jan 29, president of the Hiroshima Chamber of Commerce Ota announced the formation of the Futaba-kai group of 11 companies (including Mazda itself) which have pledged to purchase a total of Mazda vehicles by the end of fiscal 2009. The Chugoku Electric Group will bring their 2010 purchases forward and buy 450 vehicles at a cost of 4.5 billion yen. Hiroshima Bank plans to purchase 120 vehicles and Hiroshima Gas 110; Momiji Bank, Hiroshima Dentetsu, Chugoku Joza (sake brewery) and Chugoku Shinbun plan to buy 126 vehicles between them.

It seems like only yesterday that all the talk was of cutting back on vehicle use, or at least switching to more fuel efficient vehicle technologies. Now, it seems that unless an industry that is damaging our environment is propped up the economy will collapse. Of course, I have no idea of what is discussed behind closed doors, but in the published reports I've seen there has been no mention of balancing support for the economy with concern for environment. Couldn't this be an opportunity to do both, by boosting demand for more earth friendly vehicles.

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