Mitsubishi
Motors Australia Ltd slumped to a record loss of $186.4 million in calendar
2000, seemingly losing ground in its battle for survival as a Down Under car
maker, writes Mike Duffy.
But its managing director Tom Phillips today announced the company was ahead
of target to bounce back to a $10 million-plus profit, aided by a boost in exports to
the United States and the Middle East.
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If successful, the Australian arm of the Japanese car maker, now controlled
by DaimlerChrysler, will have pulled off a turnaround of almost $200 million.
The huge loss for 2000 eclipsed the previous highest deficit of $130 million
in 1999.
Managing director and chief executive officer Tom Phillips acknowledged the
results were "disappointing".
"However, the company’s fortunes have turned around and I am confident
of a modest profit over the $10 million mark in 2001,” he said.
"We are currently running ahead of budget set to achieve that target."
He
blamed unfavourable currency exchange rates and the cost of funding voluntary
redundancy packages for 600 mainly white collar workers for the huge loss. The
company since has announced it is hiring 300 workers to build significant numbers
of cars ordered by Mitsubishi affiliates in the US and the Gulf region.
General Motors’ Australian subsidiary Holden was the only Australian car maker
to post a profit for the year 2000. The General earned $237 million, but Ford
lost $16 million and Toyota $6.3 million.
Mitsubishi’s annual results, released today, are in line with an outcome, forecast
by Mr Phillips in March.
The car chief said Mitsubishi was $3 million ahead of a budgeted result for
a $10 million profit this year.
The revival plan is predicated on the Australian dollar remaining above the
58 yen mark – more than four yen below the current rate.
The company slumped to its biggest loss in the year to December 31 despite
a boost in turnover from $2.237 billion to $2.471 billion.
This was achieved by the sale of 73,241 cars and commercials in Australia –
compared with 69,923 in 1999.
Mitsubishi exported 12,036 vehicles worth $436 million during the year compared
with 9956 units worth $321million in 1999.
But
the company lost heavily on exchange rates and, like Toyota, sold some models
at a loss.
"Extensive restructuring has placed the company in a sound position for
the future," Mr Phillips said.
"We are a much leaner, more flexible and a more responsive organisation
with a flatter management structure.
"The major contributing factor (leading to the loss) was the unfavourable
currency exchange rate.
"The yen strengthened against the dollar by 18
percent in a relatively short timeframe," he said.
"It was not possible to recover these additional costs due to the extremely
competitive nature of the(car) market.
"The foundations have now been laid for a positive future. There will
continue to be a focus on reducing our costs, while expanding out export sales
into North America and the Middle East and I expect we will report a modest
profit this time next year."
Meanwhile, Auistralia’s Federal Industry Minister Nick Minchin is to meet Mitsubishi
Motors Corporation chief Rolf Eckrodt in Tokyo on Thursday for a crucial meeting
on Australian import tariffs.
A month ago, Mr Eckrodt called for a five year freeze at the current level
of 15 per cent.
Senator Minchin is to inform the MMC chief operating officer that legislation
already has been passed which will reduce tariffs on vehicles to 10 per cent
on January 1, 2005.
This move has the agreement of the four Australian car makers – including Mitsubishi
Motors Australia.
The big four signed off on the 2005 tariff cut in exchange for $2 billion in
support in the form of grants from the Automotive Competitiveness and Investment
Scheme.
Senator Minchin will inform Mr Eckrodt that he estimates Mitsubishi Australia
will receive at least $200 million in grants over the next five years.
|
Mitsubishi
profits and losses: |
|
|
Year
|
Profit/Loss
|
|
2000
|
–
$186.4 |
|
1999
|
–
$130m |
|
1998
|
$3.6m
|
|
1997
|
$106m
|
|
1996
|
-$65.8m
|
|
1995
|
-$43m
|
|
1994
|
$10.6m
|
|
1993
|
-$11.3m
|
|
1992
|
$2.6m
|
|
1991
|
-$23.8m
|
|
1990
|
$25.9m
|
|
1989
|
$71.2m
|
Author Mike Duffy is Motoring Editor of The Advertiser and the Sunday Mail
in Adelaide.
|
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