Photo: mazda.com
While it is no secret that supply chain issues and parts shortages have hampered automobile manufacturing worldwide since the Covid pandemic held the world hostage, Mazda USA has a new problem.
It is common knowledge that the three main components of manufacturing are land, labor, and capital, but companies really only have control over two of those; land and capital. Labor in manufacturing or any business for that matter is the biggest headache and the one component companies have little control over.
Mazda added a brand new model to its offering in the U.S. in the form of the CX-50 crossover to take on compact crossover rivals Hyundai Tucson, Nissan Rogue, and Toyota RAV4. They are assembling their new crossover at a factory in Alabama, jointly operated with Toyota.
The problem? A shortage of labor in an ultra-tight market where unemployment in the state is at around a scant 2%. It does not matter how automated an assembly plant is, there is still a need for human contribution to make things flow.
Mazda has the capacity to assemble 150,000 vehicles per year at the Huntsville plant. However, to reach that level, the company would need to operate more than a single shift, but the shortage of employees makes that impossible.
Senior Managing Executive Officer Masahiro Moro, as reported by Automotive news said, “Retention is not so easy, so the local staff has been working hard to provide training and ensure employee retention. We work to ensure stable operations on one shift there, and then look to move to two-shift operations. So, we are pushing back the two-shift timeline a little.”
The company stated that demand remains strong, but sales of the CX-50 were just 16,006 through the end of October. Could it be that U.S. consumers are no longer looking at gas-powered vehicles for their next automobile purchase or are high interest rates to blame? Regardless, the lack of sales does not indicate adding a second shift is warranted.
Like many automakers. Mazda is bracing for a slowdown in the U.S. economy and together with the lingering supply chain issues expected to last well into 2023, has trimmed its wholesale volume output by 80,000 vehicles.
Despite the headwinds, Mazda profits improved dramatically in Q3 compared to the same period last year to the tune of $516.9 million versus $94.1 billion in 2021.
Mazda added a brand new model to its offering in the U.S. in the form of the CX-50 crossover to take on compact crossover rivals Hyundai Tucson, Nissan Rogue, and Toyota RAV4. They are assembling their new crossover at a factory in Alabama, jointly operated with Toyota.
The problem? A shortage of labor in an ultra-tight market where unemployment in the state is at around a scant 2%. It does not matter how automated an assembly plant is, there is still a need for human contribution to make things flow.
Mazda has the capacity to assemble 150,000 vehicles per year at the Huntsville plant. However, to reach that level, the company would need to operate more than a single shift, but the shortage of employees makes that impossible.
Senior Managing Executive Officer Masahiro Moro, as reported by Automotive news said, “Retention is not so easy, so the local staff has been working hard to provide training and ensure employee retention. We work to ensure stable operations on one shift there, and then look to move to two-shift operations. So, we are pushing back the two-shift timeline a little.”
The company stated that demand remains strong, but sales of the CX-50 were just 16,006 through the end of October. Could it be that U.S. consumers are no longer looking at gas-powered vehicles for their next automobile purchase or are high interest rates to blame? Regardless, the lack of sales does not indicate adding a second shift is warranted.
Like many automakers. Mazda is bracing for a slowdown in the U.S. economy and together with the lingering supply chain issues expected to last well into 2023, has trimmed its wholesale volume output by 80,000 vehicles.
Despite the headwinds, Mazda profits improved dramatically in Q3 compared to the same period last year to the tune of $516.9 million versus $94.1 billion in 2021.
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