Mitsubishi outlines plan to become profitable by 2006

May 22, 2004|By CHICAGO TRIBUNE

Mitsubishi Motors Corp. outlined a plan yesterday to return the Japanese automaker to profitability by 2006 that spares its sole U.S. assembly plant, in Normal, Ill.

The Illinois plant escaped the shuttering of a car assembly plant in Japan and an engine plant in Australia that are part of the automaker's plan to pare 11,000 workers - about 20 percent of its global work force - over the next two years.

The plan to rescue Mitsubishi, outlined yesterday in Tokyo, will include raising $4 billion from investors to help reduce the automaker's $9 billion debt and fund development of future products. Chairman and chief executive Yoichiro Okazaki said it was Mitsubishi's "last chance to survive as an automaker."

Okazaki detailed the plan after announcing Mitsubishi lost $1.9 billion in the fiscal year that ended March 31, expects to lose $2.2 billion in the current fiscal year and doesn't expect to return to profitability until fiscal 2006.

The company was dealt another blow when it suffered what one executive dubbed "the Daimler shock" when U.S.-German automaker DaimlerChrysler AG decided last month against offering more money for a turnaround.

Once the plan is completed, DaimlerChrysler's stake in Mitsubishi Motors will be reduced from 37 percent to about 23 percent.

The Chicago Tribune is a Tribune Publishing newspaper. The Associated Press contributed to this article.

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