TOKYO (AP) -- Shaken by a cover-up scandal and a spate of recalls, Mitsubishi Motors Corp. on Wednesday said it will slash paychecks and reduce other costs to make up for an expected plunge in car sales.
Chief executive Yoichiro Okazaki said the series of recalls since a corporate turnaround plan was announced last month will likely reduce domestic sales for the fiscal year ending March 31, 2005 to 220,000 vehicles. That's a 40 percent drop from the previous year and down from the initial target of 300,000.
The Tokyo-based automaker expects a similar sales decline in the next fiscal year, trimming 60 billion yen ($548 million) from the company's operating profit this year and next.
Executives' salaries will be cut by a quarter to a half, while rank-and-file workers' wages will be cut by 5 percent for the next two years as part of a plan to trim costs by 72.6 billion yen ($663 million) this fiscal year and next, the company said Wednesday.
These moves are in addition to the cost-cutting efforts announced May 21 that included cutting nearly 11,000 jobs, or a quarter of its work force, over three years and closing a Japanese plant.
The reputation of Mitsubishi Motors was already tarnished by a recall cover-up scandal spanning decades that emerged in 2000. But in recent weeks, it has admitted it continued to hide defects in recent years and announced recall after recall, affecting some 370,000 vehicles and most of its models.
Full Story HERE
Chief executive Yoichiro Okazaki said the series of recalls since a corporate turnaround plan was announced last month will likely reduce domestic sales for the fiscal year ending March 31, 2005 to 220,000 vehicles. That's a 40 percent drop from the previous year and down from the initial target of 300,000.
The Tokyo-based automaker expects a similar sales decline in the next fiscal year, trimming 60 billion yen ($548 million) from the company's operating profit this year and next.
Executives' salaries will be cut by a quarter to a half, while rank-and-file workers' wages will be cut by 5 percent for the next two years as part of a plan to trim costs by 72.6 billion yen ($663 million) this fiscal year and next, the company said Wednesday.
These moves are in addition to the cost-cutting efforts announced May 21 that included cutting nearly 11,000 jobs, or a quarter of its work force, over three years and closing a Japanese plant.
The reputation of Mitsubishi Motors was already tarnished by a recall cover-up scandal spanning decades that emerged in 2000. But in recent weeks, it has admitted it continued to hide defects in recent years and announced recall after recall, affecting some 370,000 vehicles and most of its models.
Full Story HERE
