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Mitsubishi to Adjust Production Capacity and Cut Workers at Normal, Illinois Plant

MMC is Closing Japanese Plant and Toyota is Picking Up Trained Workforce

It shouldnt come as news that Mitsubishi Motors Corp. (MMC) has been undergoing financial challenges of late, as the subject has consumed automotive news channels regularly. While no automaker wants to grab headlines for such performance, at least the Japanese automakers restructuring plan looks to be moving forward as projected.

On Thursday, July 15th MMC received a combined 200 billion yen ($1.83 billion) in investment from J.P. Morgan Chase & Co. and Phoenix Capital, bringing its total restructuring package to 496 billion yen ($4.53 billion).

"MMC has raised new capital of 496 billion yen, which is 46 billion yen more than the recapitalization measures

As part of its new restructuring plans, Mitsubishi will shut down the Okazaki, Japan plant that makes the Colt subcompact (shown) and Grandis minivan at the end of this year. (Photo: Mitsubishi Motors North America)

set out in the companys revitalization plan announced on May 21," stated Japans 4th largest automaker in a prepared statement. "MMC now has the financial base to vigorously implement its plan."

Part of that implementation is to cut workers and lower production at its domestic (Japanese) and North American facilities. With regards to the former, MMC plans to shutter its Okazaki plant in central Japan at the end of this year. The only

Although the plant that makes the Grandis minivan (shown) and Colt subcompact is closing, 400 ex-Mitsubishi workers will find new jobs with rival Toyota. (Photo: Mitsubishi Motors North America)

silver lining, for the workers at least, is a slap in the face to financially strapped MMC, however, as cash rich Toyota announced on Wednesday, July 21st it would hire 400 of those losing their jobs at the MMC plant.

It makes sense for Toyota, running at full capacity, picks up MMCs highly skilled, fully trained workers, but it must come as a psychological blow to MMC to know these workers might never return.

MMCs Colt compact and Grandis minivan factory is located in the Aichi prefecture, which is in close proximity to several Toyota plants.

It was a kind

Mitsubishi Motors North America will lay off 1,200 workers from the Normal, Illinois manufacturing plant that produces the all-new award-winning 2004 Galant. (Photo: Trevor Hofmann, American Auto Press)

gesture for MMC just the same, as the automaker has been negotiating the deal with Toyota for weeks now. MMC had previously committed to relocating its 1,600 Okazaki plant workers to other Japanese facilities, but then started the talks when realizing that many employees would rather remain in Okazaki than uproot their families and move elsewhere.

"We are looking into re-employment opportunities with other local businesses for workers who will find it hard to relocate or wish to look for new employment," MMC commented in a statement. MMC also has 200 mature workers at the plant that are being offered early retirement packages.

The cuts continue at the automakers only U.S. manufacturing plant in Normal, Illinois. Mitsubishi Motors North America (MMNA) will lay

"This capacity adjustment will put us on a more solid foundation for long-term sustainable growth and profitability," states Finbarr ONeill, chairman and CEO, Mitsubishi Motors North America. The Normal, Illinois plant also produces the sporty new Endeavor crossover SUV. (Photo: Trevor Hofmann, American Auto Press)

off 1,200 workers before it eliminates one of two production shifts in October of this year. The automaker says the volume reduction is part of "strategic efforts" to align production output with customer demand, which should improve long-term profitability.

"We have significantly reduced our dependence on fleet sales and eliminated risky consumer financing products, which have resulted in lower sales volumes. As we work to rebuild natural retail demand for our vehicles, our production volumes must be adjusted accordingly," commented Finbarr ONeill, chairman and chief executive officer, Mitsubishi Motors North America. "This capacity adjustment will put us on a more solid foundation for long-term sustainable growth and profitability. We need to be a market-driven, not a production-driven company."

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