TOKYO -- Japanese automaker Mitsubishi Motors Corp. will cut nearly 11,000 jobs, or 22 percent of its global work force, close an assembly plant in Japan and receive a $4 billion infusion from the Mitsubishi group and other investors under a revival plan its chief executive described as its “last chance.”
Under the plan announced Friday, Mitsubishi Motors will keep open its U.S. plant in Normal, Ill., but will shutter an engine plant in Australia while keeping a passenger car plant there. The company will close a passenger car plant in Okazaki in fiscal 2006.
The automaker, burdened with more than 1 trillion yen ($9 billion) in debt, plunging car sales and a spate of recalls, also reported a much steeper than expected loss of $1.9 billion for the fiscal year ended March 31.
The automaker had been dealt a serious blow by a surprise announcement last month by U.S.-German automaker DaimlerChrysler that it would not provide a fresh cash infusion. Its image has been badly tarnished by recurring defect cover-ups that began four years ago.
“This is our last chance to continue as an automaker,” said Mitsubishi Motors CEO Yoichiro Okazaki.
Standing before a packed room of reporters at Tokyo headquarters, Okazaki also apologized and bowed deeply to the families of the two people who had died in 2002 accidents, suspected of being linked to defects in wheels and clutches of Mitsubishi trucks, resulting in thousands of vehicles being recalled this year.
The proposed job cuts will reduce the company’s global work force to 38,200 by April 2007 from the current total of 49,100, officials said. Mitsubishi, which employs workers in factories and offices in Japan, the United States, Europe and Australia, did not give a regional breakdown of the job cuts.
Under the plan, DaimlerChrysler’s stake in Mitsubishi Motors will be diluted to between 22 percent and 23 from the current 37 percent, but officials said the alliance projects will continue such as the joint development of small cars and engines as well as sharing parts called platforms.
Full Story HERE
Under the plan announced Friday, Mitsubishi Motors will keep open its U.S. plant in Normal, Ill., but will shutter an engine plant in Australia while keeping a passenger car plant there. The company will close a passenger car plant in Okazaki in fiscal 2006.
The automaker, burdened with more than 1 trillion yen ($9 billion) in debt, plunging car sales and a spate of recalls, also reported a much steeper than expected loss of $1.9 billion for the fiscal year ended March 31.
The automaker had been dealt a serious blow by a surprise announcement last month by U.S.-German automaker DaimlerChrysler that it would not provide a fresh cash infusion. Its image has been badly tarnished by recurring defect cover-ups that began four years ago.
“This is our last chance to continue as an automaker,” said Mitsubishi Motors CEO Yoichiro Okazaki.
Standing before a packed room of reporters at Tokyo headquarters, Okazaki also apologized and bowed deeply to the families of the two people who had died in 2002 accidents, suspected of being linked to defects in wheels and clutches of Mitsubishi trucks, resulting in thousands of vehicles being recalled this year.
The proposed job cuts will reduce the company’s global work force to 38,200 by April 2007 from the current total of 49,100, officials said. Mitsubishi, which employs workers in factories and offices in Japan, the United States, Europe and Australia, did not give a regional breakdown of the job cuts.
Under the plan, DaimlerChrysler’s stake in Mitsubishi Motors will be diluted to between 22 percent and 23 from the current 37 percent, but officials said the alliance projects will continue such as the joint development of small cars and engines as well as sharing parts called platforms.
Full Story HERE
