Mitsubishi Motors to close one of its two plants in Adelaide
Mitsubishi says no decision on Australia
15:59 AEST Mon May 17 2004
One of Mitsubishi's two Australian operations will be scrapped in a global restructure to be announced next week, a report says.
Either Mitsubishi's engine plant or assembly factory, both located in Adelaide's south, would close under the company's plan to be detailed next Friday, a Japanese newspaper reported.
Federal Industry Minister Ian Macfarlane and South Australian Treasurer Kevin Foley were due to meet with Mitsubishi executives in Japan today, but appear likely to be told that both Australian operations will not remain.
Mitsubishi Motors Australia president Tom Phillips was unavailable for comment as he was also travelling to Japan for pivotal meetings.
Before departing, Mr Phillips said he was optimistic Mitsubishi Australia would continue as a car maker but could not comment further.
The high-powered Australian delegation to Tokyo follows months of speculation about the future of the car maker's Australian operations, considered crucial to SA's economy.
Mitsubishi has a workforce of about 3,500 at its plants in South Australia.
Japanese daily newspaper Nihon Keizai Shimbun reported it had obtained a final draft copy of Mitsubishi's rehabilitation plan.
The newspaper said the plan called for the closure of one Japanese operation and one Australian operation.
Under the plan, expected to return a $3.9 billion boost to capital expenditure, Mitsubishi's focus would increase on Japanese and Chinese markets.
Concern for the future of the Adelaide engine plant at Lonsdale and the assembly factory at Clovelly Park heightened two weeks ago when German-US car giant DaimlerChrysler withdrew support for a $10 billion bail-out for Mitsubishi Motors Corporation.
Nihon Keizai said Mitsubishi Motors would announce a financial assistance program next week, including a $US3.9 billion ($A5.69 billion) capital increase.
According to the final draft of its business rehabilitation plan, the company would boost its capital by some Y450 billion ($A5.72 billion) through new-share sales and debt-for-equity swaps, the paper said.
Other Mitsubishi group firms and some rehabilitation funds have already agreed to buy the new shares, the business daily said, adding that the auto maker is likely to announce the plan on Friday.
Mitsubishi Motors has been hit by slumping sales in the key North American market, heavy debt and recall scandals.
Under the plan, Mitsubishi Heavy Industries Co. Ltd., Mitsubishi Corp. and Bank of Tokyo-Mitsubishi Co. Ltd. will each buy some Y40 billion ($A508.74 million) in preferred shares, the newspaper said.
Other Mitsubishi group firms will buy some Y30 billion ($A381.56 million) in preferred shares, it said.
In addition, Bank of Tokyo-Mitsubishi and Mitsubishi Trust and Banking Corp. will acquire preferred shares for some 130 billion yen in loans extended to the auto maker.
Mitsubishi Motors also plans to raise some Y150 billion ($A1.91 billion) yen by issuing common stock to Phoenix Capital Co., a corporate rehabilitation fund, and other companies.
Following the capital increase, DaimlerChrysler's stake in the auto maker will drop to less than 30 per cent from the current 37 per cent, Nihon Keizai said.
In North America, the company will scale down the operations of its factory in the US state of Illinois and liquidate its financing subsidiary after writing off losses, it said.
With the rehabilitation program, the car maker hopes to return to the black by March 2006, it added.
lets spare a thought for those workers who are facing what sound like very uncertain times.
I hope they can sort something out and continue production there it could be disaster for the Automotive Industry in Adelaide if they dont, remember its not just mitsubishi workers that loose out there are quite a few companies that will have to lay off workers.
I hope they can sort something out and continue production there it could be disaster for the Automotive Industry in Adelaide if they dont, remember its not just mitsubishi workers that loose out there are quite a few companies that will have to lay off workers.
Yeah I know for a fact Bosch in Clayton in melb are looking into around 150 - 200 possible layoffs if it closes,VDO is looking into the same lines along with siemens electronics!
Sad days for all involved if it happens, unless Daimler Chrysler steps in and starts turning out dodges at the SA plants it dont look to good for them!
It'd be ironic though having a chrysler roll out of a former plant!
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That's right it's not just the people at Mitsubishi that are affected, this will set of a chain reaction,this is a shame, I feel for those who's job's are in danger.
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Yes there's going to be a lot of ramification to all of this if the Mitsubishi plant closes down,i sincerly hope they can rescue it and save jobs,all the better for the car industry as a whole.
Cheers John
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How about the bloody designer who caused all these losses?, maybe Mitsubishi should hire GP to help design the new Magna. True, sad days for Mitsubishi, and my thoughts go out to the workers; lets hope things turn out well
I would like to see DaimlerChrysler step in and start making 300Cs here. That would save all the jobs, and give the consumer a much better car then the Magna is/was.
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