Mitsubishi to go, says report
smh.com.au
Wednesday March 31 2004
Troubled Japanese car-maker Mitsubishi Motors is considering terminating production in Australia as part of its restructuring efforts, a report said today.
Mitsubishi Motors, owned 36.97 percent by US-German auto group DaimlerChrysler, also plans to sell its plant facilities in Australia, the Asahi Shimbun said.
The company runs an engine manufacturing plant and an auto assembling plant in Australia.
The auto plant has output capacity of 70,000 units a year to produce passenger cars for the Australian market as well as for export to the United States and the Middle East.
By withdrawing from Australia, Mitsubishi will concentrate production in Japan, the United States, the Netherlands, Thailand and the Philippines, the daily said.
Meanwhile, the Yomiuri Shimbun, Japan's top-selling daily, said the Bank of Tokyo-Mitsubishi, the main bank of Mitsubishi Motors, has asked state-funded Development Bank of Japan to extend loans of up to 100 billion yen ($1.27 billion) to help the struggling car-maker.
Mitsubishi Motors is to announce a restructuring plan on April 30.
Later, Mitsubishi Motors denied it would halt its production in the United States saying the report was "totally false".
According to the Japanese business daily Nikkan Kogyo Shimbun, the Japanese car-maker, in which DaimlerChrysler AG owns a 37 percent share, plans to halt production of Mitsubishi-brand vehicles at a plant in Illinois as part of a restructuring program to be unveiled in late April.
"North America is very important market, and we have no plans to end auto production there," a spokesman for Mitsubishi Motors said.
According to the news report, the restructuring program was being drafted under the initiative of DaimlerChrysler.
The Illinois plant, the automaker's only manufacturing facility in North America, would produce only Chrysler-brand vehicles after Mitsubishi Motors North America Inc. (MMNA), a wholly owned manufacturing unit of Mitsubishi Motors in California, took a capital injection from the Chrysler division of DaimlerChrysler, the report said.
After the withdrawal, Mitsubishi Motors would sell only exported Mitsubishi-brand cars in the US, it said.
Mitsubishi Motors' earnings have deteriorated due mainly to struggling North American operations -- slack sales and defaults on auto loans -- as well as declining sales in the domestic market.
In February, the company revised downward its forecast of pre-tax losses to 115 billion yen $US1.1 billion ($1.46 billion) in the fiscal year ending March 31, from its earlier estimate of 62 billion yen losses.
Japan's Asahi Shimbun also reported Mitsubishi Motors was considering halting production in Australia and selling manufacturing facilities there.
The newspaper reported the move was part of a review of manufacturing operations in the wake of a slump in sales. Mitsubishi Motors runs an auto assembling plant and an engine manufacturing plant in Australia.
No denial of plans to close the Australian plant was reported.
AFP
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