TOKYO -- Pandemic lockdowns and semiconductor shortages are not the only production headaches hobbling Mazda. An ultra-tight labor market is also slowing the company’s ramp up to full production of the CX-50 crossover at its new plant in Alabama.
Mazda is having trouble attracting workers and keeping them at the plant, which is still working at one shift some 10 months after its line-off ceremony in January.
Senior Managing Executive Officer Masahiro Moro said the company is pushing back its original timeline to add a second shift by the end of this year.
The Japanese automaker is struggling with staffing amid low unemployment in the state.
“The employment rate stands around the 2 percent level in Alabama,” Moro 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.”
Mazda has full-production capacity to build some 150,000 vehicles at the Huntsville, Alabama assembly plant, which is jointly operated with Toyota.
But sales of the CX-50, the only vehicle it builds there, reached only 16,006 through October.
Speaking on Thursday at Mazda’s financial results announcement, executives said U.S. demand for Mazda vehicles remains strong, despite talk of recession. But they warned that the economy in Mazda’s most important market is expected to weaken in the spring, possibly sapping demand.
That could undercut Mazda’s strategy of moving the brand up market and reaping higher revenue per unit, especially as it readies the introduction of a new top-line CX-90 crossover for the U.S. market next year.
That is because consumers facing higher interest rates and economic hard times are likely to shift their spending toward lower grade, lower margin models.
“We think the U.S. economy will likely slow down, damping consumer sentiment,” global sales chief Yasuhiro Aoyama said.
“High inflation and interest rates could force customers to downgrade the models they purchase. We will carefully monitor such a change in demand and find ways to produce and supply popular models. This will be a big pillar of our efforts.”