Mitsubishi Company Restructuring
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Mitsubishi Company Restructuring
Mitsubishi Motors reportedly plans 4,500 job cuts in restructuring
AFX News Limited
April 20, 2004
Mitsubishi Motors Corp (MMC), Japan's only money-losing automaker, plans to cut 4,500 jobs, or about 10 pct of its worldwide workforce, as part of a major restructuring plan to be unveiled April 30, the Yomiuri Shimbun daily reported, without citing sources. One thousand of the job cuts will occur in Japan, with the other cuts made to its overseas operations, particularly in Europe, the US and Australia, Japan's largest-selling daily said. As a result, MMC's worldwide workforce will fall to about 40,000, down 45 pct from the level in 2000, the newspaper said. An MMC spokesman declined to comment, beyond describing the report as "speculative".
The restructuring plan which MMC is currently drafting with its major shareholder DaimlerChrysler AG and other Mitsubishi group companies is the focus of nearly daily stories in the Japanese media. The German-American auto group owns a 36.97 pct stake in MMC, and is expected to play the lead role in injecting billions of dollars more to turn the Japanese automaker around. While Japan's top three automakers -- Toyota Motor Corp, Nissan Motor Co Ltd and Honda Motor Co Ltd -- are expected to post record sales and profits for the past year to March, MMC is floundering in red ink.
Mitsubishi Motors expects to post a net loss of 72 bln yen for the past year to March, compared to a profit of 37.3 bln yen the previous year. DaimlerChrysler in February posted a 637 mln usd loss for 2003, due in part to the problems at MMC. MMC's troubles are due to plunging sales in North America after it tightened sales incentives, to stem an alarming increase in defaults on loans to the mainly young buyers it previously targeted. MMC is expected to post a charge of more than 40 bln yen to write off bad loans.
According to Japanese media reports, the restructuring plan to be unveiled April 30 calls for 750 bln yen in new capital to be injected into the automaker, primarily by existing shareholders. DaimlerChrysler reportedly will invest as much as 450 bln yen to turn Mitsubishi Motors into a subsidiary within two or three years. Some 100 bln yen will be provided by Mitsubishi proup companies -- Bank of Tokyo-Mitsubishi Ltd, Mitsubishi Corp and Mitsubishi Heavy Industries Ltd -- and 200 bln yen by institutional investors, the Yomiuri and other media have reported, typically citing unnamed company sources. MMC will use the funds to implement a sweeping restructuring of its manufacturing operations and to develop new models, with the aim of returning to profitability by the year ending March 2007, the reports say.
To restructure, Mitsubishi Motors will realign and coordinate its operations with DaimlerChrysler, and concentrate on manufacturing subcompact cars, resulting in a halving of its domestic product lineup of about 20 models. How that will be achieved in terms of downsizing and reorganizing current manufacturing operations has been the subject of the greatest speculation in the Japanese press.
AFX News Limited
April 20, 2004
Mitsubishi Motors Corp (MMC), Japan's only money-losing automaker, plans to cut 4,500 jobs, or about 10 pct of its worldwide workforce, as part of a major restructuring plan to be unveiled April 30, the Yomiuri Shimbun daily reported, without citing sources. One thousand of the job cuts will occur in Japan, with the other cuts made to its overseas operations, particularly in Europe, the US and Australia, Japan's largest-selling daily said. As a result, MMC's worldwide workforce will fall to about 40,000, down 45 pct from the level in 2000, the newspaper said. An MMC spokesman declined to comment, beyond describing the report as "speculative".
The restructuring plan which MMC is currently drafting with its major shareholder DaimlerChrysler AG and other Mitsubishi group companies is the focus of nearly daily stories in the Japanese media. The German-American auto group owns a 36.97 pct stake in MMC, and is expected to play the lead role in injecting billions of dollars more to turn the Japanese automaker around. While Japan's top three automakers -- Toyota Motor Corp, Nissan Motor Co Ltd and Honda Motor Co Ltd -- are expected to post record sales and profits for the past year to March, MMC is floundering in red ink.
Mitsubishi Motors expects to post a net loss of 72 bln yen for the past year to March, compared to a profit of 37.3 bln yen the previous year. DaimlerChrysler in February posted a 637 mln usd loss for 2003, due in part to the problems at MMC. MMC's troubles are due to plunging sales in North America after it tightened sales incentives, to stem an alarming increase in defaults on loans to the mainly young buyers it previously targeted. MMC is expected to post a charge of more than 40 bln yen to write off bad loans.
According to Japanese media reports, the restructuring plan to be unveiled April 30 calls for 750 bln yen in new capital to be injected into the automaker, primarily by existing shareholders. DaimlerChrysler reportedly will invest as much as 450 bln yen to turn Mitsubishi Motors into a subsidiary within two or three years. Some 100 bln yen will be provided by Mitsubishi proup companies -- Bank of Tokyo-Mitsubishi Ltd, Mitsubishi Corp and Mitsubishi Heavy Industries Ltd -- and 200 bln yen by institutional investors, the Yomiuri and other media have reported, typically citing unnamed company sources. MMC will use the funds to implement a sweeping restructuring of its manufacturing operations and to develop new models, with the aim of returning to profitability by the year ending March 2007, the reports say.
To restructure, Mitsubishi Motors will realign and coordinate its operations with DaimlerChrysler, and concentrate on manufacturing subcompact cars, resulting in a halving of its domestic product lineup of about 20 models. How that will be achieved in terms of downsizing and reorganizing current manufacturing operations has been the subject of the greatest speculation in the Japanese press.
guess we'll have to wait and see...
poor management i say... i think their design team is american... look at how poor of a quality the cars are and they feel comfortable releasing to the public anywayz... atleast the evo is good heh
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MMCs problems are not do to product, but horribly poor marketing and financing to unqualified young kids and poor customer support. Bringing more feature rich, upsacle products and attracting welathier folks who pay their bills and providing proper customer care will quickly get them in the black. DCs funds should help to renovate Mitsu into more of a Lexus/Acura style/market segment. The walmart/kia/hyundai segment is not one that matches Mitsu's products. Evo MR, Montero, etc..
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"Mitsubishi Motors will realign and coordinate its operations with DaimlerChrysler, and concentrate on manufacturing subcompact cars, resulting in a halving of its domestic product lineup of about 20 models." Sounds like they will be focusing more on cars like the EVO!!!
Originally posted by Mister2zx3
MMCs problems are not do to product, but horribly poor marketing and financing to unqualified young kids and poor customer support. Bringing more feature rich, upsacle products and attracting welathier folks who pay their bills and providing proper customer care will quickly get them in the black. DCs funds should help to renovate Mitsu into more of a Lexus/Acura style/market segment. The walmart/kia/hyundai segment is not one that matches Mitsu's products. Evo MR, Montero, etc..
MMCs problems are not do to product, but horribly poor marketing and financing to unqualified young kids and poor customer support. Bringing more feature rich, upsacle products and attracting welathier folks who pay their bills and providing proper customer care will quickly get them in the black. DCs funds should help to renovate Mitsu into more of a Lexus/Acura style/market segment. The walmart/kia/hyundai segment is not one that matches Mitsu's products. Evo MR, Montero, etc..
Keith
Well I think their product lineup sucks as well. For an example of a company that had ****ty product and turned it around, look at Nissan. In the 90's Nissan had effectively eradicated all products of interest from their product lineup. Nowadays at least all their cars look like they came from the same company, from the 350Z on down, and they are all quick and attractive, due to some clever platform engineering. Besides the Evo, there isn't a single Mitsubishi that I would recommend to anyone that I liked, except for maybe the Montero for serious off roaders and Dakar fanatics. Their design sucks, the cars look like late 90's Korean imports, and all the technology for which they became famous in the past two decades is notably absent.
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From: Between the Blue and the Sand
Originally posted by ChodeSlappinFun
"Mitsubishi Motors will realign and coordinate its operations with DaimlerChrysler, and concentrate on manufacturing subcompact cars, resulting in a halving of its domestic product lineup of about 20 models." Sounds like they will be focusing more on cars like the EVO!!!
"Mitsubishi Motors will realign and coordinate its operations with DaimlerChrysler, and concentrate on manufacturing subcompact cars, resulting in a halving of its domestic product lineup of about 20 models." Sounds like they will be focusing more on cars like the EVO!!!
When you use 'Daimler Chrysler' and 'subcompact cars' in the same sentence, you are very likely to mention the Smart car line next...which is set to hit the US shores in 2 years.
Will DC have Mitsu assembling Smart cars for the US market?
Last edited by Secret Chimp; Apr 20, 2004 at 02:40 PM.
you forgot the rest of the article...the scary part
"And that raises the possibility that DaimlerChrysler will not intervene to help Mitsubishi.
"The best solution would be to pull the plug," said Juergen Pieper at Metzler Bank in Frankfurt. "The whole idea of a World AG automaker is unconvincing, and the choice of partners -- Chrysler and Mitsubishi -- has been poor."
"The best solution would be to pull the plug," said Juergen Pieper at Metzler Bank in Frankfurt. "The whole idea of a World AG automaker is unconvincing, and the choice of partners -- Chrysler and Mitsubishi -- has been poor."
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I think until recently Chrysler might not have been seen so well. as mitsu isn't now. But look how well DC has done. THe new Pacificas, SRT6.. Chrysler has been turned around. the 300C.. Wow! If DC takes Mitsu as their low end line with Chrysler midline and Mercs upline, they have a great coverage of the market.
