New Mitsubishi Motors President Affirms Commitment to U.S. Market

TOKYO March 1, 2005; Yuri Kageyama writing for the AP reported that scandal-plagued Japanese automaker Mitsubishi Motors has no plans to sell its plant in the United States or further trim its U.S. work force.

Instead, it promised to stay committed to the U.S. market, which is critical for the company's turnaround, the company's new president said Wednesday.

ADVERTISEMENT Osamu Masuko, appointed a month ago as president and chief operating officer, said production capacity at the plant in Normal, Illinois was reduced by about half last year to 125,000 or 130,000 vehicles a year to boost profitability.

No more job cuts are planned in the United States, Masuko told a small group of reporters at Tokyo headquarters.

Mitsubishi Motors Corp. trimmed the plant's workers last year from about 1,900 to about 900 today, according to the automaker.

A spate of recall cover-up scandals that surfaced five years ago has taken its toll on Mitsubishi Motors, which is expecting a loss of $4.5 billion,for the fiscal year ending March 31.

The Japanese public was stunned when the Tokyo-based manufacturer acknowledged it had systematically hidden auto defects for decades to avoid recalls. It promised to come clean in 2000, but hidden recalls resurfaced last year, badly tarnishing its image.

The U.S. plant is now running at a pace of about 100,000 vehicles a year, but Masuko said he hopes to boost that to full-capacity soon, with the Eclipse going on sale in the United States in the summer. He's also looking to markets such as Russia, the Ukraine and the Middle East.

"As a single market, North America is an important market for us," he said.

Masuko denied the company had ever considered selling its U.S. operations or approached potential buyers. He also denied it was thinking about seeking a new partner in the United States and said it was determined to go at it alone, although it will continue to work on projects with DaimlerChrysler AG of Germany as it has in the past.

Masuko promised that this month Mitsubishi Motors will announce the results of an internal investigation on the recall scandal, including penalties for employees. He declined to elaborate.

He also said a settlement with DaimlerChrysler will be signed this month. DaimlerChrysler, which owns a small stake in Mitsubishi Motors, had demanded damages for the recall scandal. He refused to say how much was being paid in compensation.

Since last year, Mitsubishi Motors has announced two massive cash bailouts from the Mitsubishi group of companies to go on with its revival plan after DaimlerChrysler decided to end additional funding and effectively quit its role as an alliance partner.

The Mitsubishi group includes a bank, heavy machinery maker, electronics company and others. Masuko is a 30-year veteran at Mitsubishi Corp., a trading company, and is the latest in a string of presidents for Mitsubishi Motors over several years.