Yamaha on third CEO in three months as net income drops $2.1 billion

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Yamaha_Financial_Turmoil.jpgA flurry of press releases issued by Yamaha Motor Japan just before Christmas paints a picture of a company in turmoil. It’s all terribly convoluted, so we’ll try and simplify things with a timeline.
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December 2005:
Despite a year of record profits, newly appointed Yamaha
Motor President and CEO Takashi Kajikawa has ominous words for The
London Times
. He says, “It’s not like the old days when young Japanese
boys joined biker gangs. It wasn’t so good for the public image but it
was good for sales. Nowadays, their mothers think it’s too dangerous
and forbid their sons to buy bikes. And anyway, youngsters would prefer
to stay in and play on their computers.”

February 6, 2007:
Yamaha Motor announces that it has broken all records
for net sales, operating income, recurring profit and net income during
2006. Net income was $834 million, a 20.6 percent improvement over
2005.

February 12, 2009: Net income is reported to have fallen 97.4 percent to just $20.5 million.

October 26, 2009: Takashi Kawjikawa resigns as President and CEO and
assumes role as Director. Tsuneji Togami, the former Chairman and
Director takes over as President and CEO.

November 4, 2009: Yamaha Motor announces net income for the first nine
months of 2009 has fallen $2.1 billion over the same period during the
previous year after a net loss of $1.75 billion. Motorcycle sales are
down 26.6 percent over the same period during the previous year, marine
product sales are down 40.2 percent, power product sales are down 55
percent, other products (including car engines) are down 37.6 percent.

November 12, 2009: Yamaha reshuffles 15 of its Directors and Executives.

November 16, 2009: Yamaha announces it will no longer employ “ringers”
on its rugby team — a major source of pride for the company — effective
April, 2010 the team will only be made up of full-time Yamaha employees.

December 4, 2009: Takaaki Kimura is appointed Acting President and CEO
after Tsuneji Togami is hospitalized. The move is described as
“temporary.”

December 14, 2009: Four senior executives are re-shuffled

December 22, 2009: Four Directors, 11 Executive Officers and 40
executives change job titles. Seven group companies, including Yamaha
Motor Canada, get new Presidents.

December 22, 2009: It’s announced that, effective March 25, 2010,
Tsuneji Togami will resign as Acting President and CEO and current
Senior Executive Officer Hiroyuki Yanagi will succeed him as the
company’s leader. Additionally, four company directors, including
former President and CEO Takashi Kajikawa, will resign and assume the
nebulous title of “Advisor.” Eight other Executive Officer level
positions will change at the same time.

Full financial results for 2009 have not yet been announced.

Asked about rumors that Yamaha Motor USA would join Suzuki in not
importing 2010 model year street models
into this country, a Yamaha
representative stated, “No truth to that at all.  Our 2010 models were
launched in September and we have been taking orders and releasing to
dealers since October on select models.”

Yamaha

Thanks for the tip, Ivar.

  • stalin

    what’s with all the shuffling back and forth bussiness..sounds a bit chaotic to me

  • General Apathy

    Ahh yes the one footed no-hands sideways stoppie. Eat your heart out Rossi!

    • http://muthalovin.com the_doctor

      haha! Jorge really CAN fly!

  • http://www.seomoz.org Mateo

    Hard to hear a comment from a motorcycle company that believes its next generation of riders would rather stay in and play on their computers. Sad shit.

  • jay

    Time for Rossi to leave Yamaha and head to the brand that he belongs on DUCATI!

  • http://seeadamtrain.wordpress.com/ Adam

    Q: Is this a perfect storm for MC manufacturers, not just Yamaha?

    *Ageing boomers.

    *Little or no disposable income in the US.

    *Lots of bad press – E.g. Around military posts in the US, suicide by vehicle/motorcycle was widely reported as soldiers returned from Iraq and Afghanistan.

    *For the time being, looks like Yamaha is shuffling deck chairs on the Titanic.

    • http://hellforleathermagazine.com Wes Siler

      You forgot:

      *An environment of complacency created by companies crediting themselves rather than larger economic forces for 20 years of increasing sales.

  • Cameron Baum

    The problem is that Yamaha is an honest company that is honestly looking at the issues it faces ahead.

    Yes, the road is going to be VERY bumpy for all the moto-companies. Even those who were in very good positions just a year ago and have made sound financial choices (not taken on a crapload of debt) are going to really need to buckle down to survive.

    They should just do what the US motorcycle industry is doing and obfuscate like a mother-fracker, smoke and mirrors, throw the only good part of their company under the bus and cash in its long-term future for a few more months worth of mediocre sub-$30 NYSE prices.

    But that too is going to come to an abrupt end soon. And a more self-destructive one at that. Yamaha will be here when this depression finally ends. I can’t say the same for the US motorcycle industry…

  • http://greatjoballweek.blogspot.com/ Case

    Losing billions of dollars in a down market is a bummer, but losing the ringers on the rugby team has got to be heartbreaking.

    Aren’t all the big four losing money on their bikes /powersports divisions? I think this is dog-bites-man news by now. Not to say it doesn’t deserve to be reported; just added to the long list of bad financial news from all things motorcycle.

    • http://hellforleathermagazine.com Grant Ray

      Case, normally I’d agree about the man-bites-dog thing, but there is a major shake-up happening at Yamaha’s motor division which the press releases, if anything, play down.

      That said, I’m happy to see they have the brass to make changes in executive management. Now let’s see if they can (hopefully) do the same with policy.

  • shinigami

    This issue needs discussion of the nearly unprecedented strength of the yen, which has an enormous impact on a Japanese manufacturer dependent largely on export.

    The bike market in Japan started bleeding out fifteen years ago. Half the stores on “bike street” in Ueno (Tokyo) have closed in the past 2 years. It’s still hard as hell to get licensed for a bigger (read: more profitable to the seller) bike in Japan, even though Hardly Ableson and others succesded in getting the government to ease up on some restrictions… ironically nearly tripling the sales of Gold Wings but having hardly any effect on the Hardley market.

    That, and “Hard Gay” isn’t as popular as he used to be, but I digress…

    All the action is here (USA) and Europe, and you all know what’s happening here.

    With that said though, there’s a big billboard of Rossi on the JR Shinkansen platform in Hamamatsu. I bet that’s Yamaha’s way of telling the arriving Honda and Suzuki execs who’s still on top in the outside world…

  • Woody

    If you’re gonna post Lorenzo’s highside, you should make it this one.
    http://www.coditoergosum.net/wp-content/uploads/2008/05/lorenzo_fly.jpg

  • motoalchemy

    confusing, scary and ridiculous all at once.

  • Sean Smith

    While it totally blows that Yamaha is having some trouble making a buck, I can’t focus with that picture of Jorge staring me in the face. You’ve got to wonder what his face looks like under that helmet. Also, am I the only one who thinks he kinda looks like a soldier from planet of the apes mid-leap before he tackles someone?

  • LADucSP

    when the economy tanks, if your entire business is recreational vehicles, then you’re going to suffer.

    nobody absolutely ‘needs’ a new jetski, or R1.

    even on the music side, i have a yami saxophone. it’s 20 years old. looks new. don’t need a new one (not that i can play the damn thing).

    or, a $3,500 A/V receiver? i’m good with what i’ve got for now.

    the mistake, is all the bullshit management shuffling. it’s a pr show and it creates distraction, confuses strategy, kills morale, and is an utter sham.

    yes, it’s gonna hurt. now, hunker down, get to work and battle through it like the rest of us!

  • http://bizbreakblog.com Marshall Haas

    Just makes me wish I was in a motorcycle startup right now. Now is the time for the electric motorcycle startups to shake things up while the big 4 hurt – as they’re attempting to do.

    When the big guys are hurting, its time for the small agile guys to get a chunk of the market as we get out of this economy.

  • TML

    If it is so hard to sell motorcycles right now, why is it that I can walk into a dealership with cash and not be able to negotiate a freakin’ dime off MSRP?

    Are the dealers (in Montana, Idaho, Wyoming and western Washington) so flush that they don’t have to move product, or are they all so scared that they are trying to squeeze every last dime out of the customer before they go bankrupt and lose all their stock in liquidation?

    Seriously, thoughts anyone?

    • Trav

      Working at a big 4 dealership currently. TML I’m not sure why you can’t get a deal on a Yam unless they pulled your fico and don’t want to give you the time of day.

      The lower levels (reps. and tech assistants) in yam have thankfully remained unchanged over the past 2 years and tech support is still great. Now to see if we can get anyone financed to get a bike sold!

      Thanks Wes

    • http://ashevegas.com Trav

      Working at a big 4 dealership currently. TML I’m not sure why you can’t get a deal on a Yam unless they pulled your fico and don’t want to give you the time of day.

      The lower levels (reps. and tech assistants) in yam have thankfully remained unchanged over the past 2 years and tech support is still great. Now to see if we can get anyone financed to get a bike sold!

      Thanks Wes

    • Mr.Gone

      I’m at a Honda Yamaha Ducati and Triumph dealer and pretty much all our current stock is $1,000-$1,900 off MSRP, hell we have a 2009 Raider $3,900 off and nobody is willing to go for it. I can’t imagine why your area dealers would refuse cash, its possible they’ve lost so much already that financially they just can’t drop their prices any more. We’ve lost 2 dealers in the area in just the last few months, some of these places are truly hurting.

  • GasBreather09

    Rosi for President 2010!

  • sburns2421

    There are few reasons I would think dealers wouldn’t be willing to deal at the moment. One could be if they don’t thik they will be able to replace sold stock with 2010 models, Suzuki isn’t even bringing 2010 streetbikes in to the US. I heard Yamaha might do the same, or have extremely limited amounts imported.

    Another equally worrysome possibility would be the conundrum that Big 3 car dealers had in spring/summer 2008 when gas prices went sky high and they were sitting on a lot of SUVs and 400hp V8 “family cars”. Would you rather be shot or starved? They had the option to sell at heavily depressed market prices, lose money on each one, and have their bank call the note once they realize they were actually going to be bankrupt. Or they could hang on to inventory by not lowering prices and pay interest each month until out of cash and then go bankrupt. So go broke now or go broke in a few months. Pick your poison.

    There are so many dynamics at play it is hard to predict what will happen in 6-12 months. If the Yen collapses, new japanese bikes will be cheaper. If the Dollar collapses, oil will get expensive again and possibly people will look to bikes as they did in 2008. If both curencies collapse, maybe we all win…or lose. Who knows.

  • powermatic

    Sounds like the Al Davis School Of Business Management. And we all know how well that works.

    Motorcycles will have another sales upswing, guaranteed: just wait for gas to hit 5 bucks a gallon. Those companies that have cut costs, reduced debt, matched product to market, and prepped the buying public will be A-Okay. Others-guess who ‘others’ is-will struggle, at best.

  • http://top-car-collections.blogspot.com/ Kiky

    That Lorenzo ?