CORRECTION-MITSUBISHI MOTORS-USA/PLANT Mitsubishi Motors president: Ending US production due to low output, not FX level

Record ID: 146249

  • Title: CORRECTION-MITSUBISHI MOTORS-USA/PLANT Mitsubishi Motors president: Ending US production due to low output, not FX level
  • Date: 28th July 2015
  • Summary: TOKYO, JAPAN (JULY 27, 2015) (REUTERS) ***WARNING CONTAINS FLASH PHOTOGRAPHY*** (FROM LEFT TO RIGHT) MITSUBISHI MOTORS BOARD MEMBER YOSHIHIRO KUROI, MITSUBISHI MOTORS PRESIDENT TETSURO AIKAWA, MITSUBISHI MOTORS EXECUTIVE VICE PRESIDENT HIROSHI HARUNARI, AND BUSINESS DEPUTY MANAGER, YOICHI YOKOZAWA SITTING FOR NEWS CONFERENCE (SOUNDBITE) (Japanese) MITSUBISHI MOTORS PRESIDE
  • Embargoed: 12th August 2015 13:00
  • Keywords:
  • Location: Japan
  • Country: Japan
  • Topics: General
  • Reuters ID: LVA751XIVQWPBIC07IYVU5IYSI8
  • Aspect Ratio: 16:9
  • Story Text: The president of Mitsubishi Motors Corp said on Monday (July 27) that it will end production at its U.S. auto plant in Illinois later this year due to dwindling output there.
    The automaker's President and Chief Operating Officer Tetsuro Aikawa was speaking at a news conference after the company confirmed plans to end already-dwindling production at its sole North American plant, in Normal, Illinois, and serve the U.S. market from plants in Japan and Thailand.
    "We have reached this conclusion because it has become clear that we do not have the scale of production and that it is not economically logical to maintain a U.S. base," Aikawa said.
    Japan, Southeast Asia and Russia will become the automaker's principal production hubs.
    "We will be terminating the production of Outlander (Sports) created at our Bloomington plant, and consolidate production at our Okazaki plant and we will transform our business model so as to export for Northern America, Russia, Middle East, Central and South America markets from Japan," Aikawa added.
    Shares rose more than 5 percent as investors welcomed the switch, which comes as Mitsubishi Motors increasingly focuses output in Southeast Asia, where its pickup trucks and sports utility vehicles (SUVs) are popular.
    The automaker currently makes cars in Thailand and the Philippines, and said in February it will build a new factory in Indonesia for vehicles such as its Pajero Sport SUV.
    Aikawa said the move to pull the plug on the Normal factory - opened in 1988 as a joint venture of Mitsubishi Motors and its then-partner, Chrysler - was prompted by low-volume production rather than shifts in foreign exchange rates making exports from Japan cheaper.
    "Our decision this time had nothing to do with foreign exchange rate levels as I said previously, our decision is based on the fact that the operation of the plant under the current scale of economies is difficult," he added.
    Aikawa said he thought finding a buyer for the plant would be relatively easy because demand for cars in the buoyant U.S. market was strong. The automaker is still looking for potential buyers for the U.S. plant to preserve jobs for the 900 hourly workers at the plant.
    "Currently we are not in negotiations with any specific buyer. We will start looking for one now along with the UAW (United Auto Workers union)," he said.
    At its peak in the early 2000s, the Normal plant built more than 200,000 cars a year, while in 2014 it produced 69,178 Outlander Sport vehicles. In the fiscal year ended March 2015, the company's U.S. sales totalled 82,000, compared with a global total of around 1 million.
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