American Suzuki announced today its intention to focus solely on the long-term growth of its motorcycle/ATV and marine divisions and will discontinue new automobile sales in the continental U.S. In order to accomplish the realignment, American Suzuki Motor Corporation will file Chapter 11 in the United States Bankruptcy Court, Central District of California in Santa Ana.
"The most important thing for you to know is that we intend to continue to operate our Motorcycles/ATV and Marine businesses as usual," Suzuki Motor Corp. Chairman Takashi Iwatsuki wrote in a letter sent to customers today. "We firmly believe the actions we are taking will allow us to continue to deliver the exciting and innovative motorcycle, ATV and marine products that have made Suzuki one of the most famous and reliable names in the industry. And. of course, all warranties will continue to be honored - just as they have for the past four decades. Further, parts and service will continue uninterrupted.
"We remain very proud of our high-quality motorcycles, ATV and marine products, and we will continue to bring to the U.S. market more of the products that you have come to know and expect, including our full lineup of sportbike, cruiser, touring, scooter, dualsport, motocross, off-road motorcycles and KingQuad ATV line, as well as our flagship DF300AP, state-of-the-art DF20A, and DF15A, among other models. Suzuki will also continue to have a strong presence as a sponsor of teams in Supercross, outdoor motocross and road racing."
As part of its chapter 11 filings, American Suzuki will submit a proposed Plan of Reorganization and Disclosure Statement that specifies how the motorcycle, ATV and marine divisions will be maintained and enhanced, and how its relationship with automotive dealers will be largely transitioned to support consumers and dealers through continued parts and service operations, Suzuki says. Suzuki Motor Corporation (SMC) or its nominee intends to purchase ASMC's motorcycle, ATV and marine businesses, as well as the automotive service operation responsible for parts and warranties, through a new U.S. subsidiary that will retain the ASMC brand name.
ASMC believes it has sufficient cash on hand to operate its businesses during the restructuring. If necessary, ASMC will request permission from the Court to borrow additional funds from SMC needed during the restructuring, a release from Suzuki stated.
According to the release, ASMC has filed a series of first-day motions requesting approval to continue paying employee wages and benefits in the ordinary course, offering dealer incentives and payments under customer warranties. ASMC also expects to pay vendors in the normal course of business for goods and services delivered on or after its November 5, 2012 filing. Payments for goods received before ASMC's November 5, 2012 filing will be made in accordance with the chapter 11 procedure.