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Automotive Industry News : Top Stories Last Updated: Aug 16th, 2006 - 11:01:00

Mitsubishi to Cut 1,200 US Jobs
By Mike Cervantes
Jul 23, 2004, 00:27

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Courtesy: Mitsubishi Motor North America
Tough times continue for Japan’s Mitsubishi Motors as the company announced a plan late Wednesday night to cut 1,200 jobs from its Normal, Ill. manufacturing plant. The layoffs are part of Mitsubishi’s plan to pull itself out of the financial instability that has been hanging over the company for the past year.


The Normal plant currently employs around 3,100 people working in two shifts. That will drop to one shift by October when the 1,200 workers will be fired. “This was a very difficult decision, but we believe it is necessary for the long-term success of the company,” said Rick Gilligan, Mitsubishi North America’s president and CEO of manufacturing.


The job cuts were expected following DaimlerChrysler’s decision to not bail out their Japanese partner and to essentially distance themselves as much as possible from Mitsubishi. The two company’s deal to build vehicles together at the Normal plant will not be renewed in 05, leaving the plant solely to Mitsu. Currently, the Mitsubishi Galant, Eclipse, and Endeavor are produced at the plant along with the Dodge Stratus and Chrysler Sebring. Production at Normal has dropped 22% despite the introduction of the new Galant and relatively new Endeavor.


Worldwide, a company-restructuring plan calls for 11,000 job cuts – almost one fourth of the company’s workforce – and plant closures in Japan and Australia. The plan has been called Mitsubishi’s “last chance” by executives, and also includes $4 billion from Mitsu’s parent company and lending institutions.


Mitsubishi was stung by major recalls throughout Japan, and by their “0-0-0” financing plan in America that gave Mitsu the youngest average buyers in the industry until many of those owners defaulted on their loans. Now, with Mitsubishi in incentives withdrawals (US sales are down almost 27% this year), the company’s dealers are relying more heavily on used cars to make money. No clear plan has been made public in regards to plans for vehicles beyond what is currently on sale. 

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