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EXCLUSIVE: AUSTRALIA: Mitsubishi Down Under wins war of words

By just-auto.com editorial team | 30 March 2001

Mitsubishi Motors Australia's long-term future as a car maker has been officially assured by its Japanese parent. But not without much loss of face for its president Takashi Sonobe, writes Mike Duffy.

Mitsubishi Motors Corporation of Japan also gave the official go-ahead for the Adelaide-based subsidiary to invest $100 million in a revised, streamlined Magna for release in 2003.

An official statement put to rest more than a year of speculation of closure which would have threatened the jobs of 3200 workers within the company and thousands more in the components sector.

A statement, issued by MMC, ended a week of conflicting statements by key Mitsubishi executives in Adelaide and Tokyo.

The statement issued in Japan is believed to have been made in response to a strong demand from Mitsubishi Australia's managing director Tom Phillips. Mr Phillips last night refused to confirm he had delivered MMC an ultimatum concerning his future.

But he said: "I have been totally angry and frustrated - I could be crude and say pissed off - with having to continually defend the future of our business.

MMC Australia managing director Tom Phillips

"I will be going down the assembly line on Monday to personally apologise to our workers for the worry and grief they have had to suffer during months of uncertainty and counter-productive statements from Japan.

"I will be giving every worker a copy of the statement from Japan to put their minds at rest.

"Now if everyone doesn't mind, I'd like to do the job I was hired to do nine months ago and that is to expand Mitsubishi's future as a car maker.'' A statement from MMC international car operations director Steve Torok was released in the form of a company memo to the company's chief operating officer Rolf Eckrodt.

The statement said: "Mitsubishi Motors Australia Ltd carried out an ambitious restructuring plan last year to build a base for sound future growth.

"At this moment in terms of productivity and profitability we are seeing significant improvements.

"We believe the Australian market has a bright future and accordingly, it is our desire to maintain a full range of operations in Australia, including manufacturing.

"There is no plan to close any Australian manufacturing facility.

"Further, in recognition of the importance and potential of the Australian market we are planning several actions to enhance current products.

"We have also begun planning for successor models that meet the future needs of the Australian market with further potential for export.''

MMC president Takashi Sonobe

The memo will seriously embarrass MMC president Takashi Sonobe who on Wednesday told a press conference in Tokyo that Mitsubishi Australia's performance in the January-March quarter had not been promising.

On the same day, Mr Phillips said in a keynote speech to the Adelaide Motor Show breakfast Mitsubishi was $3 million ahead of its 2001 budget to turn last year's record $186 million loss into a nominal $10 million profit.

Mr Phillips sent an eight-page fax to Japan and is understood to have spelled out possible consequences of the situation.

The conflicting statements over the first-quarter results were followed by another clash yesterday over a $20 million loan offered by the State Government.

Mr Phillips said the loan offer had been accepted and Mr Sonobe said it had not.

Mitsubishi Motors Australia is expected to announce a significant export order on Monday which will cement its return to profitability.

* Author Mike Duffy is motoring editor of The Advertiser and the Sunday Mail, Adelaide, South Australia.


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