Subaru, part of Fuji Heavy Industries, announced it will start a cost-cutting drive that includes eliminating around 1,000 jobs and reducing spending on research and development. Employees in Japan will also be offered early retirement.
Cost-cutting is on the table because profits have fallen this year, with income down 3.8% and revenue down 3.4% in the first six months of 2005. U.S. sales alone fell 6.1% to 88,000 vehicles in the first six months of this year. Overall, the company is still sitting on an operating profit of $153.8 million even though North American operations are bleeding off some of that profit.