Embattled Japanese car giant Mitsubishi Motors will pay dearly for any decision to shut its Australian plants which employ up to 20,000 people directly and indirectly, officials have warned.
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Agence France-Presse (AFP) said fears for the future of the two plants have been raised by the resignation of Rolf Eckrodt as chief executive and president of Mitsubishi Motors Corp after its parent DaimlerChrysler AG decided against putting up more money to finance the struggling Japanese partner’s turnaround.
AFP said the Australian federal government and the South Australian state government have been involved in an intense battle to save Mitsubishi Australia Ltd. and both say they have been left in the dark about future plans for the local plant.
The South Australian government has vowed to make it as expensive as possible for the carmaker if it quits Australia, including seeking repayment of funds committed as part of an $A85 million ($US63 million) rescue package two years ago to try to ensure its survival, AFP said.
State industry minister Kevin Foley reportedly said he believed Mitsubishi’s Australian operations would survive, but if not, the company would be made to pay heavily.
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By GlobalData“The exit strategy for Mitsubishi out of Australia is an expensive, costly one,” Foley told local ABC Radio on Monday, adding: “This government would make it as expensive and as costly as we possibly could.”
According to AFP, he said that would include requiring Mitsubishi to pay back money the government had previously pumped into the company to keep it in Australia.
“We put 35 million dollars in as a package,” he said, adding: “We’ve got that money very well secured in terms of our ability to require that money to be paid back should certain things not be met. They’ve got to rehabilitate the site, there’s a whole lot of exit costs that Mitsubishi would have to incur.
“So for those decision-makers, even though we’re a small, minute part of their worldwide operation, the actual exit cost has a significant impact on their balance sheet, which is already haemorrhaging.
“This is not an easy decision for them – to close Adelaide.”
