Mitsubishi Motors (MMC) plans to axe around 300 jobs in the US through voluntary retirements, a Japanese newspaper reported.
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The Nikkei business daily said MMC was bracing itself for a group net loss of around JPY20bn (US$223m) for the fiscal year ending 31 March, as it struggled with weak sales and adverse currency effects.
The paper said in an unsourced report the company plans to reduce 1,600 full-time employees at its US plant in Normal, Illinois, to 1,300 by the end of March through voluntary retirements.
The Normal plant was built as a joint venture with Chrysler to build US models for both automakers using shared platforms and drivetrains. Mitsubishi subsequently bought out Chrysler’s share and took sole control of the 100,000 units a year factory which currently produces Galant sedans, Endeavor SUVs, Eclipse coupes and Spyder convertibles. Production for the year to October 2008 was down 24%, according to a Bloomberg News report at the time.
Plant workers last October agreed to an hourly pay cut and an increased share of healthcare premium costs. Mitsubishi pledged it would keep the plant open to the end of August 2012 while the union agreed to a two-tier wage system where new assembly line recruits would start at $14 per hour or $20 per hour for maintenance workers. Any recalled workers would be taken back at a lower wage rate, 70% of the new rate or $16.80 per hour.
Last December, Mitsubishi said it would suspend Normal production for seven weeks from 18 February, citing sluggish sales – down 25% from 2007.
A spokesman told the Chicago Tribune this would be the longest shutdown at the plant since it opened in 1988. As with recent Toyota shutdowns in the southern US, employees would report to work to perform other duties such as maintenance or training and would be paid as usual during the shutdown.
The Nikkei also said Mitsubishi was discussing scaling down the annual capacity of a bew plant it is building with PSA Peugeot-Citroen in Russia.
MMC has not confirmed the paper’s claims but the Nikkei’s reports regularly prove to be accurate.
