Yamaha Looks to Slash Costs

Last month Yamaha said it would ask for 10 percent of its employees nationwide to take voluntary early retirement “to ensure the company’s health and competitive ability.” Takashi Kajikawa, president and CEO, Yamaha Motor Co. Ltd., says in an open letter to investors that move is one of several the company needs to make.

“The economic crisis grew beyond anything we could have anticipated, compelling us to revise our business plan,” Kajikawa says. “Like so many companies hit hard by the economic nosedive, we are now challenged to maximize our core capabilities just to survive.”

Kajikawa says the credit crunch and rising interest rates are taking their toll on results for Yamaha’s fiscal year ended Dec. 31. The company’s mainstay businesses – motorcycles, marine products and recreational vehicles in North America and Europe – are off significantly, and motorcycle and robot sales in Indonesia, China, Thailand and Latin America, favorable until very recently, now also are experiencing a rapid decrease in demand due to a developing.

“In view of the extremely severe economic conditions, we must concentrate on two priorities this year: maximizing profits, and undergoing extensive cost-cutting,” Kajikawa says. “Some may think these are too obvious to mention, but in the current economic climate, I believe we have to get back to basics and work to streamline our entire corporate structure.

“On the expenditure side, we must eliminate any expense that is not absolutely necessary. We have to be sure of the objective and cost-effectiveness of every expenditure, focusing on minimizing costs for those items that are necessary.