Isuzu Motors Ltd. intends to freeze large capital spending plans, including in Saudi Arabia and Russia, as the financial crisis hits vehicle demand around the world.
Isuzu President Susumu Hosoi said in a recent interview the major bus and truck maker is also considering slashing board members' compensation as part of cost-cutting efforts.
"Given unclear outlooks for sales, the market and foreign-exchange rates, we have to freeze all projects that have not yet been officially decided on to restrain our spending," according to Hosoi.
Isuzu had planned to build a factory to assemble trucks in Saudi Arabia and also to produce trucks at its plant in Russia, among other large spending plans.
But the projects will be shelved at least for the time being, the 59-year-old president said.
While Isuzu initially set aside an outlay of ¥43.3 billion for capital investment in the latter half of the current business year through March, it now plans to cut the amount by about half, Hosoi said.
Hosoi's comments come as Japan's vehicle industry saw demand fall in November to its lowest level in nearly 40 years, with Isuzu's sales plunging 20.1 percent from a year earlier to 4,015 units.
The Tokyo-based manufacturer is cutting all of its roughly 1,400 nonregular jobs at plants in Fujisawa, Kanagawa Prefecture, and Ohira, Tochigi Prefecture, by the end of this month, including jobs for which contract periods have not expired.
Some seasonal workers recently filed a lawsuit seeking a court injunction to invalidate Isuzu's advance notice of termination of their employment contracts.
Isuzu is considering allowing temp workers to continue living in its dormitories until their original contracts expire and helping them to find new jobs, he said.
