Mitsubishi Australia is negotiating with its workers to cut production in a bid to reduce a growing stockpile of unsold cars, Australian Associated Press (AAP) reported.
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The company is in talks with the Australian Manufacturing Workers Union (AMWU) and hopes to put a final plan to staff next week. Under discussion is cutting the working week at Adelaide’s Tonsley Park assembly plant to four-and-a-half days or having workers take holiday, rostered days off or other leave to allow the stockpile of up to 4,500 vehicles to be reduced.
The talks follow a significant slump in sales of the locally-produced Magna and Verada models, AAP said.
The slump is reportedly in part due to the result of previous uncertainty over the future of Mitsubishi as a manufacturer in Australia and partly because of the company’s plans to replace the car with an all-new model next year.
The latest move follows a two-week shutdown of the assembly operations in July, when workers took leave, in a similar bid to cut the stockpile.
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By GlobalDataIn an official statement cited by AAP, Mitsubishi confirmed it had met senior union officials to discuss the progress of its new model project as well as current sales and stock holding.
“The company and the union are reviewing what production days are required to ensure that all facility changes for the new model, due for introduction in the second half of 2005, remain on schedule, while balancing existing stock levels and production against expected sales demand,” the statement said.
“This joint company-union review is expected to be completed within the next week and Mitsubishi and the unions will communicate the outcome to employees next week.”
Australian Associated Press noted that, earlier this year, production at Tonsley Park was reduced to 120 vehicles a day from a high of about 290 several years ago. The factory capacity was currently about 300 vehicles a day.
To the end of September this year, demand for Mitsubishi’s Magna and Verada models in the local market had slumped by 37% to 11,149 compared to 17,738 over the same period last year, the report added.
But if the locally-made cars were taken out of the equation the company was not doing so badly, with demand for its other products down just 17.8%.
AMWU state secretary John Camillo told AAP the union was aware of Mitsubishi’s serious position and was willing to work with the company to find a solution.
