NewsReporter
04-15-2004, 05:39 AM
Various news sources have leaked plans of struggling Japanese automaker Mitsubishi to get itself back in the black ahead of an official announcement on April 30th. Huge losses brought about by ill-conceived loan offers in the US have meant Mitsubishi is the only unprofitable Japanese manufacturer, according to Automotive News Europe. Now talks with its part-owner DaimlerChrysler have resulted in several crunch decisions regarding its managerial, financial and operational courses.
ANE reports that DC and Mitsubishi are trying to rope 800bn yen ($7.5bn) in 'rescue funds' together, most of which would come from capital infusions from other Mitsubishi group members (Mitsubishi Heavy Industries and the Bank of Tokyo-Mitsubishi, for example). But according to the paper, Mitsubishi Motors will also 'probably apply for government backing for the restructuring plan - a formality that would enable it to pay less taxes on the share issuance. It also hopes to tap state-backed Development Bank of Japan for loans.'
Industry rumours also suggest the company intends to streamline its production operations by closing one of its Japanese factories and opening up a new base in China, where labour and parts are cheaper. Production of its Pajero (Shogun) off-roader may be abandoned, too, though these assertions were denied by company execs. The only US-based plant, in Illinois, will have its production cut by as much as 60,000 units, as well as suffering job losses. Fifty US dealerships are also slated to be closed in 2004. Mitsubishi's Australian business may be in jeopardy as sales in that country have slipped 'by double-digits', says ANE. The total number of model ranges will be trimmed from 33, though reductions to the European line-ups have not been confirmed yet.
Source: Channel 4
ANE reports that DC and Mitsubishi are trying to rope 800bn yen ($7.5bn) in 'rescue funds' together, most of which would come from capital infusions from other Mitsubishi group members (Mitsubishi Heavy Industries and the Bank of Tokyo-Mitsubishi, for example). But according to the paper, Mitsubishi Motors will also 'probably apply for government backing for the restructuring plan - a formality that would enable it to pay less taxes on the share issuance. It also hopes to tap state-backed Development Bank of Japan for loans.'
Industry rumours also suggest the company intends to streamline its production operations by closing one of its Japanese factories and opening up a new base in China, where labour and parts are cheaper. Production of its Pajero (Shogun) off-roader may be abandoned, too, though these assertions were denied by company execs. The only US-based plant, in Illinois, will have its production cut by as much as 60,000 units, as well as suffering job losses. Fifty US dealerships are also slated to be closed in 2004. Mitsubishi's Australian business may be in jeopardy as sales in that country have slipped 'by double-digits', says ANE. The total number of model ranges will be trimmed from 33, though reductions to the European line-ups have not been confirmed yet.
Source: Channel 4