Mazda replaces first non-Japanese company head amid signs of turnaround
Nov. 14, 1997
TOKYO (AP) _ Mazda Motor Corp. said president Henry Wallace, the first non-Japanese to head a major Japanese company, stepped down Friday after helping steer the world's 12th largest automaker out of a four-year slump.
Wallace, 52, said it was an appropriate time to step down, citing Mazda's improved financial performance and strengthened ties with Ford Motor Co., which owns a controlling one-third stake, said spokesman Hiro Akutagawa.
The tall, mustachioed native of Scotland assumed the top job at Mazda in June last year shortly after Ford increased its stake in the company to 33.4 percent from 25 percent. Wallace had previously served as the head of Ford's Venezuela division.
The move came as no surprise to auto industry analysts.
``Wallace's departure is not unexpected,'' said Saul Rubin, auto analyst at SBC Warburg Japan Ltd., noting Mazda is back on track for stronger profit growth after a racking up losses for much of the decade.
The appointment of Wallace last year stirred concern that Mazda, a proud, formerly family-run business, would face massive job cuts and a future as little more than a small car division of Ford.
But Wallace sought to put those fears to rest by pledging to trim payroll by attrition instead of layoffs.
Still, he oversaw the implementation of cost-cutting measures such as the use of shared auto platforms with Ford and the introduction of a merit-based employee performance evaluation system. He appeared in full-page Japanese newspaper ads to plug Mazda's cars.
And his efforts were paying off. On Friday, Mazda reported a three-fold increase in parent company net profit for the April-September period to 555 million yen, or $4.4 million. Sales rose 11.4 percent to 746.22 billion yen.
Mazda, based in Hiroshima, has wallowed in red ink at the group level since 1993. But SBC Warburg analyst Rubin said the Mazda group will probably stage a return to profitability after the current fiscal year which ends in March.
Mazda shares fell 12 yen, or 3.2 percent, Friday to close at 361 yen on the Tokyo Stock Exchange. The decline stemmed from jitters the management change may indicate further trouble for the carmaker, traders said.
Vice president James Miller, an American who is part of a management team installed by Ford, will replace Wallace. Miller, 51, recently headed Ford's Eastern European and South African operations.
Ford bought its 25 percent stake in Mazda in 1979.