Mitsubishi News Australia
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LATEST. February 1, 2006. 500 workers at MMAL's Adelaide plant want to take voluntary redundancy! Offer was for only 250! What do Mitsubishi workers know from insiders' vantage point? mitsubishisucks' guess is that they know that Mitsubishi 380 is one of the biggest flops in the Australian Auto industry. A 640 million dollar hype/question?
For more on the miserable tale of Mitsubishi 380 - a car that failed as soon as it was launched, please go to Galant er Magna er Mitsu 380 or whatever - A Nightmare for MMAL.
August 11, 2004. New Mitsubishi ad is protested by the Advertising Standards Board. The ad shows an all-wheel drive Mitsubishi Magna racing two other cars down a dirt road. It seems to have breached the voluntary car industry advertising code which does not allow depiction of motor sport in advertising. Mitsubishi will have to either modify the ad or pull it off air.
July 4, 2004. The compny received main components for a new press - to be the largest of its kind in the nation. The press will be used from November for the new Magna, to be released in late 2005. It will allow the side to be made in one piece instead of 3 pieces made currently and then welded together. It will save on time to make a car.
The new press line will comprise two stages each pressing 2400 tonnes and two stages each pressing 800 tonnes. It will stamp whole body sides at the rate of 450 per hour and will improve build quality by eliminating the need to weld several panels together. It will cost $33 million. Holden, its competitor, is getting its second 1100 tonne press.[theage.com]
June 8, 2004. The Advertiser reprted on 'retirement' of famed auto designer Olivier Boulay, expected to go back to DaimlerChrysler. The designer of high-luxury Maybach at Mercedes, lent his "Boulay look" to Grandis people-mover, TL Magna and KL Verada and upcoming Colt and Evo VIII cars.
May 26. The Age reported that a new model Grandis was introduced replacing Nimbus and the Starwagon. Mitsubishi expects sales to pick up. Three more models, including the Colt, are expected to be introduced this year. Whether that will stop the slide in its sales has to be seen.
Note: May 24, MMC, the parent company of MMA, is rated CC by Standard and Poors. CC is just two notches above default rating and several (7) notches below investment grade rating. mitsubishisucks.com thinks that, based on its subjective evaluation, while 'guarantee' of up to year 2010-2011 is nice, voluntary redundancy packages, when and if offered, might be worth opting for while Mitsubishi still has the ability to pay. Good luck.
Restructuring Announcement
May 21, 2004. Tokyo, Japan. MMC plans to reduce its production capacity by 17% and had the following to say about its Australian operations: "MMC will also wind down operations at its engine manufacturing plant in Australia in 2005. However, today's revitalization plan confirms MMC's commitment to continue its manufacturing operations in Australia and the production of a new model in 2005."
May 20, 2004. The industry minister, Ian Macfarlane, is ready to help workers find new jobs. Employees have been briefed and it is confirmed that the Lonsdale engine plant will close down. Tonsley will offer voluntary severances. New car model sales will be monitored until 2007 and depending on that figure future decisions will be made. news.com.au earlier reported that unless the plans are changed in the eleventh hour, engine plant will close in 18 months to two years, losing 650 jobs. Assembly plant will remain open, saving 2700 jobs, to market 2005 model and prove its viability. However, another report hinted at 'phasing out' of entire Australian operations by March 2012.
May 20, 2004. The Lonsdale engine facility which makes V6 engines is expected to close down first. The Clovelly/Tonsley Park assembly plant might fall a few months later if things don't improve.
May 16, 2004. Australian Industry Minister Ian Macfarlane said that Mitsubishi Motors hasn't decided on the fate of its operations in South Australia. He made this announcement after he and South Australia state's treasurer, Kevin Foley, met Yoichiro Okazaki, in Tokyo.
May 16, 2004. Daily Yomiuri reported that Australia will lose a plant with 3,200 employees. Yoichiro Okazaki is expected to deliver this message to Australian Industry Minister Ian Macfarlane in a meeting on Monday. Whenwhile, Koji Enjo, one of the top auto industry analysts in Japan, reiterated to ABC Australia that unfortunately Australia was never a cash cow for Mitsubishi and in the bid of its own survival, its Australian operations are not such a big priority. Koji Endo said that Mitsubishi Motors does not have a strong brand image, has huge losses, both in Japan and the United States, and production capacity is only one million units on top of its quality and recalls problems - and all these are going to add up to very difficult time for it.
Mitsubishi Motors Australia's Adelaide Plant to Shut Down
LATEST: May 15, 2004. Nikkei Japan reported that informed sources hinted at decision having made about closing of one of MMA's Adelaide plants and to satify the demand for its vehicles in Australia by exporting them from Japan. Australia has two Mitsubishi plants in Australia, both in Adelaide. One is the engine plant at Lonsdale and an assembly factory at Clovelly Park. More later. We feel bad for the workers of MMA and hope they are able to get better jobs soon. Good luck.
April 29, 2004. Australian Manufacturing Workers Union (AMWU) national secretary Doug Cameron met Mitsubishi Australia managing director Tom Phillips this morning. He was upset at Treasurer Peter Costello for suggesting not much could be done.
April 26. Tom Phillips, Managing Director, Mitsubishi Australia, tried to sound optimistic by referring to large amounts of investments made in physical assets and Research and Development, commented that "So the investment already is quite significant and, as I say, these are good signs for us and reasons for us to keep going ahead."
On the other hand, South Australian Government and the Labor Unions, fearful of losing about 10,000 to 20,000 jobs related to MMC's operations, have been warning Mitsubishi about the exorbitant exit costs. By their estimates, it is about one to two million dollars.
Analysis of Mitsubishi Motors Australia's future
April 26, 2004. Mitsubishi Motors has been steadily losing market share and now sells about 6% or about 60,000 vehicles out of a million vehicle market. It is true has it has spent lots of money on planned Magna model but will it be able to sell enough vehicles to justify ongoing costs? Part of Mitsubishi's plan was to export its autos to North America, where unfortunately it has been losing market share too. Can the output be used for Asian market? Will it be cost effective compared to say, being manufactured in China?
Unfortunately, in spite of all the money that has been sunk into the new planned Magna model, this is considered to be "sunk cost" and has no bearing on the continued operation of Mitsubishi. It is our view, based on publicly available data, that it does not make any sense for MMC to continue its Australian operations from an economic point of view.
While exit costs of billion or more dollars have been mentioned, we expect that in reality it will be about 300 million Australian dollars. Workers will get about 6 months of 3 years of wages, governement will get some. It is not in the interest of Australian governement and labor to scare off Mitsubishi group and other Japanese investment.
Background and Older News
April 27, 2004. "Wake up, kids, we got the dreamer's disease." Remember the lyrics? This is from the song Get What You Give by US-based group the New Radicals. Yeah, back in 2001, those were the fell-good days. Now over 3000 Mitsubishi workers face uncertain future. Including people working for the suppliers and all the family member, this number is estimated to be around 20,000 to 50,000.
April 21, 2004. Australia's MMC employees, among all the speculation, have been waiting for a few weeks to know about their employment terms, to be announced after the April 30 top-level management meeting in Japan.
Kyodo news reported that Australian Prime Minister John Howard and Industry Minister Ian MacFarlane are in talks with Mitsubishi to save the Adelaide plant that produces Magna model cars. It employs about 3,300 and is one of the biggest employers in South Australia. Mitsubishi has already spent over A$200 million on its plans to introduce a new model there.
Much of the output from Adelaide plant came to the North America, which has seen a shard drop in sales in past year after consumer credit terms were tightened. Rumors are that DailmerChrysler is either planning to sell or close Adelaide plant.