Isuzu 2002 Annual Report Download - page 9

ISUZU MOTORS LIMITED ANNUAL REPORT 2002
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BREAKDOWN
Realign Group-affiliated companies: We will review
how Group business is developing, and rationalize and
streamline non-core businesses to build an efficient
business organization.
Review domestic RV sales business: We will effectively
use our joint sales resources with GM.
Boost efficiency of R&D program and organization: We
will focus on core platforms and use spin-off technology to
rigorously pursue an efficient development program.
II. Expand business
We will rebuild our global business structure by strength-
ening cooperation with GM in our capacity as the center
of expertise for the GM Group’s diesel engine and com-
mercial vehicle business and by allocating resources in the
best manner.
Establish a global business organization: We will estab-
lish a global network focused on four key markets—Japan,
ASEAN, China and America—enabling us to efficiently
develop, purchase, manufacture and sell products. On a
business level, we will position medium and small CVs
and pick-up trucks as “global strategic vehicles,” to develop
a new global concept vehicle.
Enhance domestic sales distribution network: We will
bolster peripheral businesses and integrate business line-
ups, in addition to selling new vehicles.
Strengthen the Power-train business: We will establish a
position as the world’s leading manufacturer of diesel engines.
Increase cooperation with GM: We will make effective
use of the resources and size of GM. Isuzu and GM will use
mutual sales channels and we will work together to jointly
develop new products.
[ THE V PLAN ]
Isuzu formulated its mid-term business plan, the Isuzu
V Plan, to radically reform its business organization and
corporate structure, restore corporate value and bolster
competitiveness.
I. Restoring corporate value
Due to an over-emphasis on domestic operations, Isuzu’s
production levels, sales infrastructure and personnel have
grown to unsustainable levels. Consequently, we will stream-
line all three elements components to appropriate levels.
We will also cut costs and pare back assets to create a cor-
porate structure that has no wasteful elements anywhere in
the Group.
Consolidate domestic production infrastructure: At the
global level, we will carry out appropriate closures or con-
solidations of our production facilities. In Japan, we will
realign our production network centered on 3 facilities. Our
target is to increase overall operating efficiency to 90% from
the 50% level at the time the plan was formulated.
Cut back Group personnel: In the coming 3 years, we
will reduce Group personnel from the current total of 38,000
employees to around 28,000.
Reduce purchasing costs: Our target is to reduce the cost
of materials purchasing by 20% over the next 3 years.
Pare total consolidated assets: We will sell assets and
shares to increase funds and improve cash flows.
Bolster earnings structure of
domestic sales companies: We will accelerate the on-
going consolidation of commercial vehicle sales companies.
Our ultimate goal is to make all outlets profitable in their
own right.
[ THE V PLAN ADVANCE ]
We reviewed the progress made with the Isuzu V Plan during
the fiscal year ended March 31, 2002. In the first half of this
fiscal year most of the plan’s initiatives were implemented on
schedule. Later in the year, however, a drastic fall in sales
occurred in the U.S. and the entire Group’s business perfor-
mance deteriorated.
The severe operating environment made us decide to
urgently rebuild our North American business and accelerate
two of the Isuzu V Plan’s eight initiatives, these three items
forming a new plan, the V Plan Advance. As soon as possible,
we will review our U.S. organization, improve the earnings
structure of our domestic sales companies and reduce our
Group personnel levels. We aim to sustain steady earnings,
even with reduced sales.
Rebuild North American business organization: We will
examine our North American business domains and busi-
ness systems in order to curb fixed structural costs.
Bolster earnings structure of
domestic sales companies: We will clarify the various
business priorities arising from the realignment of our sales
companies, and give maximum priority to initiatives which
are directly connected with improving earnings.
Cut back Group personnel: We will reduce personnel in
the entire Group, aiming at a final target for the workforce
of around 24,700.