Report: Mitsubishi Motors to cut US output 55%
05 February 2011
The Nikkei reports that Mitsubishi Motors Corp. will reduce the output capacity of its US plant in Illinois by 55% to 50,000 units, from its current annual capacity of 110,000 units.
To improve its bottom line, Mitsubishi Motors North America Inc., which operates the plant, has carried out a series of layoffs since fiscal 2004. With the number of workers having fallen to 1,300 from 2,000, it has become difficult for the plant to handle an annual output of more than 50,000 units.
The plant is currently manufacturing three models for the North American market—he Eclipse sports car, the Endeavor sport utility vehicle and the Galant midsize sedan. Mitsubishi Motors will discontinue these three models and instead make another—the Outlander Sport. It plans to produce 50,000 units of the SUV a year, with half of them likely to be exported to Latin America, Russia and Europe.
It will be very difficult to make a decent profit with USA made products-vehicles exported to Europe, Russia and SA. Further cuts will come as large exports will not materialize. The wrong vehicle built in the wrong place.
Posted by: HarveyD | 05 February 2011 at 09:10 AM
@HarveyD: Not sure why you think US products wouldn't be competitive, considering how weak the dollar is. I agree that Mitsubishi has product portfolio issues.
Posted by: Nick Lyons | 05 February 2011 at 12:15 PM
They could switch a line to make the MiEV - North American buyers might want a cheap compact EV once they catch on. But this company has taken a back seat in the EV revolution.
Posted by: Reel$$ | 05 February 2011 at 04:20 PM
NL.. For the same reason that Shell recently close its world class local refinery. With the average worker salaries over CA$100,000 a year, it was no longer competitive.
Overly strong unions and local anti-scabs laws will force many more North American firms to move out.
Producing good quality competitive small cars in USA/Canada was never successful nor profitable. Users will no longer buy lemons when high quality imported small vehicles exist. We may be better off producing light trucks and importing compact and small cars unless UAW unions face reality.
Posted by: HarveyD | 06 February 2011 at 10:12 AM