It's a sad report this time, right down to the layoff numbers. The news of Isuzu's pull-out was
posted earlier . Here's more information. Remember, we're losing new vehicles in a line we love, but other people who supported Isuzu are losing their jobs.
------------------------------------------------------
FOR IMMEDIATE RELEASE: January 30, 2008 / Isuzu News Bureau
ISUZU TO DISCONTINUE DISTRIBUTION OF NEW PASSENGER VEHICLES IN U.S.Effective January 31, 2009
CERRITOS, Calif. - Isuzu Motors America, Inc., announced today that, effective January 31, 2009, it would discontinue distributing new Isuzu passenger vehicles in North America. The discontinuation of passenger vehicles results from the prospective cessation of production by General Motors Corporation of the Ascender sport utility vehicle and the i-290 and i-370 pickup trucks.
"It has always been our intention to remain in the U.S. market," said Terry Maloney, president and COO. "However, we were unable to secure any commercially viable replacements for these vehicles."
Although Isuzu will cease supplying passenger vehicles in North America, it will continue to stand behind its customers and dealers here for years to come. Specifically, Isuzu will continue to honor all product warranties and roadside assistance programs and will maintain its owner-relations call center. In addition, to assure long-term service to its customers, Isuzu will be offering all current, U.S. Isuzu vehicle dealers the opportunity to continue on as service dealerships for Isuzu. "Let me make it crystal clear," Maloney said. "Isuzu will discontinue the sales of vehicles only. Our parts and service operation will remain fully functional. We expect the vast majority of our dealers will continue as service-only dealers."
Isuzu Motors America, Inc., is the U.S. distributor of Isuzu sport utility vehicles and diesel engines. For more information call (800) 662-2464 or access
www.IsuzuNewsBureau.com.------------------------------------------------
The irony in the next article is this picture caption for what is obviously a 4-door vehicle, the Rodeo. The repeated the caption later under a picture of an actual Amigo:
"The Amigo, a two-door convertible SUV based on the Rodeo, was produced from 1990 to 1994 and initially sold well. A 1990 model is shown."
And it's always interesting when the guy in charge of new products doesn't see it coming. He was so mad, he quit.
------------------------------------------------
Isuzu's collapse
The once-nimble Japanese brand prospered in the 1980s and '90s with its hot-selling SUVs ù then plummeted this decade. Who is to blame?Kathy Jackson, Automotive News, February 4, 2008
LOS ANGELES ù For the past four years, Terry Maloney has had to drag himself to the podium at Isuzu's annual NADA make meeting, face a grim, even surly dealer body and relay the worst possible news: No new product is coming.
Maloney won't have to do that this year, though. The Isuzu Motors America Inc. president has canceled the brand's Feb. 11 make meeting in San Francisco. Isuzu's train wreck of a U.S. sales operation is calling it quits ù after years of self-destruction.
Isuzu will stop selling new vehicles here Jan. 31, 2009. The brand's 201 U.S. dealers have a year to clear their inventories of five-seat Ascenders and small i-series pickups. Isuzu will book a 4 billion ($37 million) charge to wrap up its U.S. operations.
So what happened to the once nimble Japanese brand that as late as 1994 sold more SUVs in the United States than Toyota ù then collapsed in a heap?
Not much mystery there. Isuzu's bosses in Japan gave up on America, or at least began to treat it like a distant irrelevancy. U.S. dealers were starved of products.
The die was cast in 2002 when executives in Tokyo decided to concentrate on commercial trucks in emerging markets and let Isuzu Motors America's once lucrative light-duty vehicle business shrivel.
Still, Maloney says he didn't see the U.S. pullout coming.
"Isuzu Limited made the decision just the other day," he said last week. "It was a surprise ù a sad surprise. Not that I didn't have my eyes wide open, but it was always our intention to stay in North America."
Maloney, 59, has been president of Isuzu Motors America since 2002. He spent 17 years in sales and marketing jobs at American Motors in Detroit, then owned a Dodge dealership in Tampa, Fla., for two years before coming to Isuzu in 1989. He'll stay on with Isuzu, running its leftover parts and service business.
He delivered the bad news to Isuzu's dealer advisory board on Wednesday, Jan. 30.
"It was a sad occasion," Maloney said. "I know most of these dealers personally. It was very difficult to tell the employees and the dealers. This group stuck with us to keep the Isuzu dream alive. It has been a difficult four years."
Divorce termsIsuzu will stop selling light vehicles in the U.S. next January. Here are the incentives Isuzu has offered its 201 dealers.
ò All dealers can become service dealers. If they agree, Isuzu will pay a signing bonus equal to $1,000 per car sold, based on the average of their last 4 years of sales.
ò Dealers who do not agree to become service dealers will be offered the same assistance given to dealers who terminate franchises under their sales and service agreements.
ò The company plans to spiff up incentives to help dealers clear inventory.
Customers left SUVsSales have plummeted from 103,937 in 1999 to 7,098 in 2007 as vehicles were pruned or grew old. Seemingly overnight, U.S. customers turned away from Isuzu's truck-based SUVs in favor of more comfortable and stylish car-based cross-overs.
"Our SUVs have been stale," then-Isuzu Ltd. President Yoshinori Ida admitted in 1992. But Ida decided to do nothing about it.
Isuzu had stopped building passenger cars in 1992 and ù despite General Motors' ownership stake ù didn't have the resources to match the industry's move toward crossovers.
For Maloney, it has been the roughest of patches. At the NADA make meeting in New Orleans three years ago he told dealers there would be no new compact SUV from Thailand for the 2007 model year.
That was a kick in the groin. The Thai-built SUV would have been the first new Isuzu-badged vehicle since the Axiom debuted in 2001. Instead, Maloney informed dealers they would get a small rebadged pickup from GM ù the i-series.
The news devastated Scott Hyde, who was Isuzu's executive manager of product planning and research. "That knocked our lights out when he announced the i-series instead of the Thai SUV," Hyde says. "That took me to my knees. It was a sad thing to see. The writing was on the wall." Hyde, who had been at Isuzu since 1996, promptly quit.
At the time, dealers were selling only one nameplate ù the five- and seven-seat Ascender, based on GM's Chevrolet TrailBlazer. Just the year before, at the 2004 make meeting in Las Vegas, Maloney told dealers that the Rodeo and Axiom SUVs were going away in the summer of 2004.
Hyde says the Axiom's poor sales were a disaster for Isuzu. Designed to look like a crossover, the Axiom had a body-on-frame chassis. Consumers liked the looks but not the trucklike ride.
"The Axiom was a Hail Mary for Isuzu," Hyde said. "We didn't have many resources and diverted them from the Rodeo to the Axiom. The Rodeo got long in the tooth. We were left with not much money."
Despite the lack of product, Maloney kept telling dealers that Isuzu was in the United States for the long haul. But in December 2005, GM said it was ending production of the seven-seat Ascender, which accounted for nearly 25 percent of Isuzu's ever-slipping sales.
'Minimize risks'At the 2006 make meeting in Orlando, Fla., it was more of the same. No new product. The dealers were becoming deeply irritated. Jim M'Lady, who owns an Isuzu dealership in Chicago, believed it was Isuzu's plan to exit this market all along. At the time, he accused the company of starving out dealers so it would not have to compensate them for their assets.
Why was there nothing in the pipeline? In 2002, Isuzu Motors Ltd. in Tokyo was reeling in its third straight year of net losses. It unveiled the first of three revival plans. The blueprint summed up Isuzu's future strategy for SUVs, particularly in North America, as follows: "Minimize business risks." It was diplomatic code for "retreat."
The next year, Isuzu pulled the plug on its joint venture with Subaru in Lafayette, Ind., where it was making the Rodeo and Axiom. And back in Japan, it killed the Trooper, made at Fujisawa.
Then came the waiting game ù waiting for any good excuse to slink away gracefully. Last week's news of its withdrawal surprised few in Tokyo. "They never made any money from those SUVs in the United States, so we thought this was bound to happen all along," said Koji Endo, an analyst with Credit Suisse in Japan.
In a press release last week, Isuzu said it is leaving the United States because GM may discontinue the five-seat Ascender SUV and its small-pickup platform. GM does plan to end production of its mid-sized SUV platform on which the TrailBlazer, GMC Envoy and Isuzu Ascender are built. The vehicles will be phased out over the next couple of years. GM assembles them at its Moraine, Ohio, plant.
But GM will continue to build the GMC Canyon and Chevrolet Colorado small trucks, sources say. The trucks are produced in Shreveport, La.
A year ago, at the make meeting in Las Vegas, Maloney continued to insist that Isuzu had no plans to exit the United States. He says he still didn't know of any plans until he got a phone call late last month.
"Isuzu Limited was unable to get new product for us," Maloney said. "The SUV from Thailand was not viable. We had talked about a diesel engine, but we couldn't find a viable light-vehicle platform for the diesel. They talked to OEMs but there was no commercially viable vehicle."
One problem for Isuzu was a reputation for mixed quality, said Tom Libby, an analyst with J.D. Power and Associates.
"I don't think they ever had all the basics they needed to survive in a very competitive market," he said. "You have to have the resources to continuously refresh your product, build your brand image and develop your dealer network. And you have to have quality. In many areas, they were just not competitive with other Asian manufacturers."
Dealer council chairman John Galeani, who owns City Isuzu in Jacksonville, Fla., called the whole thing "very sad."
"I've been with them for 20 years," he said, "but they are committed to making it as painless as possible for the dealer body."
Isuzu is offering its retailers the chance to become service dealers. If they agree, Isuzu will pay a signing bonus of $1,000 per car based on the average of their last four years of sales. Dealers who don't want to become service dealers will be offered the same assistance given dealers who terminate franchises.
No news is bad newsKey points in the downfall of Isuzu Motors America
- Jan. 2004 ù Dealer council members travel to Japan to discuss future product but see nothing.
- Feb. 2004 ù At NADA make meeting in Las Vegas, dealers told that best-selling Axiom and Rodeo models would be killed, leaving them with only the GM-derived Ascender 5- and 7-seat SUVs. Captive finance company is dumped, and half of the U.S. staff is pink-slipped.
- Feb. 2005 ù At NADA make meeting in New Orleans, dealers told they will not get a new, Thai-built compact SUV expected in 2007 model year. Instead theyÆll get a version of the GMC Canyon pickup.
- Sept. 2005 ù Isuzu says it will skip the 2006 Detroit auto show.
- Dec. 2005 ù GM says it will kill the 7-seat Ascender, which accounts for nearly one-quarter of IsuzuÆs sales.
- Feb. 2006 ù No word on new product at NADA make meeting in Orlando, Fla.
- Feb. 2007 ù Still no word about product at NADA make meeting in Las Vegas.
- Jan. 2008 ù Isuzu says it will discontinue sales of new light vehicles in the U.S. on Jan. 31, 2009.
'Nice deals'"These are nice deals for the current dealers," says Roy Greenblatt, owner of three Isuzu stores in New Jersey. "The blue sky isn't much for Isuzu stores. They're paying us more than we could probably get if we sold the stores on our own."
Even arch-critic M'Lady is happy with the deal. "I've had my battles with the company, but it was a great company to do business with," he says. "When we were rocking and rolling, they treated you right. Now they're doing the right thing again."
Isuzu Motors America, headquartered in Cerritos, Calif., is not going away ù only its light-vehicle retail business. The company will continue to distribute parts for service dealers and to the company's separate commercial vehicle and powertrain operations in North America. Isuzu Motors America also handles legal, finance and human resources duties for the three divisions.
Isuzu Motors America has about 200 employees. Maloney says about 54 of the 75 employees assigned to light-vehicle distribution will lose their jobs. As for Maloney, he says: "My job continues as long as the company will have me."
Hans Greimel contributed to this report