Fuji Heavy to cut jobs as profits dip
TOKYO, Nov 8 (AFP): Fuji Heavy Industries, the Japanese maker of Subaru vehicles, announced plans Tuesday to cut five per cent of its workforce as it reported a drop in interim net profits due to weak auto sales.
Fuji Heavy, now part owned by Toyota Motor after General Motors severed its links with the group, is struggling in the face of disappointing sales of its all-wheel drive vehicles in North America and Japan.
In the six months to September net profit fell 3.8 per cent from a year earlier to 7.96 billion yen (67.52 million dollars).
Operating profit, however, rose 12.3 per cent to 17.41 billion yen as cost-cutting measures helped offset a 3.4 per cent decline in revenue to 667.10 billion yen.
Fuji Heavy said it would reduce its workforce of 14,000 by 700 by March through voluntary retirement.
The move would shave about seven billion yen from the group's annual personnel costs although it will also incur special retirement charges of some eight billion yen, said executive vice-president Shunsuke Takagi.
The group said its vehicle sales worldwide fell four per cent to 264,000 in the half-year period owing to sluggish demand for its flagship Legacy sport utility vehicles and its R2 mini vehicles.
Fuji Heavy's auto operations fared poorly in its home market of Japan, where the number of vehicles sold dropped by 7.9 per cent. In the key North American market, sales slumped 16.8 per cent.