DaimlerChrysler and MMC
Mitsubishi! > News > Japan > Mitsubishi Motors > 2004 > Daimler and Mitsubishi Plan Rescue Together
Initial Mitsubishi Motors Restructuring News
April 3, 2004. Steven Torok has left, Rolf Eckrodt will be leaving in June. Ulrich Walker, Eiji Iwakuni and Keiichiro Hashimoto too are expected to leave. German group DaimlerChrysler and Mitsubishi group have agreed to appoint Andreas Renschler as the president and the CEO.
Australia: Production might not be shut down immediately even though rumors of it are strong since report of introduction of 2005 Magna were released on April 5. Most of the cars were exported to the USA where sales have been falling. ( 2004 First Quarter Sales Disappoints by falling 20% compared to that of last year )
USA: Production of Mitsubishi-brand cars will be drastically reduced at Normal, Illinois. This is the only production plant for it in the USA.
Japan: Pajero Manufacturing plant will be shut down, while the Aichi and Okayama prefecture plants are expected to continue operations.
April 11, 2004. Nikkei (Nihon Keizai Shimbum) reported quoting unnamed sources, that the revival of Mitsubishi Motots will be done in two stages. In the first stage, DaimlerChrysler with Mitsubishi group companies including Mitsubishi Heavy Industries, Mitsubishi Corporation and Bank of Tokyo Mitsubishi, will invest about 370 billion yen in MMC, and after a few years, depending upon how this plan goes, DailmerChrysler will invest more to increase its stake in the company to about 51% and making it a subsidiary of its group. [Bloomberg, Germany]
April 13, 2004. Report from Stuttgart inform us that DaimlerChrysler's chief for commercial vehicles, Eckhard Cordes, will join Mitsubishi Motors as a director confirming the company's importance to the Asian markets. Various reports suggest that Dailmer will increase its stake in MMC to 50% in two steps. [Expatica]
April 15, 2004. Financial Times reported that institutional investors are balking at the terms of the rescue plan of MMC valued at over 6.6 billion US dollars. DailmerChrysler is trying to sell outside investors 200 billion yens (slightly less than 2 billion US dollars) in preferred stocks. One investor was quoted as stating that while the company is a B-minus firm, it thinks it is triple-A. Another investor found the conversion rate to current stock price steep since the stock prices have gone drastically since the news of rescue plan became known.
April 16, 2004. Acording to Nikkei (Nihon Keizai Shimbum), Mitsubishi Motors will jointly develop engine and chassis for new subcompacts (660cc to 1000cc) with Smart GmbH.
April 20, 2004. Yomiuri Shimbun reported that MMC might reduce its workforce by about 4,500 to about 40,000 worldwide. In 2000, including its spun off Fuso Bus and Truck division, it employed about 73,000. In Japan, Pajero Manufacturing operating in Sakahogicho, Gifu Prefecture might be shut sown completely and production moved to China. It has about 1,100 employees. NedCar B.V. in the Netherlands, which produces Colt compact cars seems to be another target, according to Daily Yomiuri. It has about 3,000 employees.
Nikkei reported that MMC was thinking of selling 20% of Mitsubishi Fuso ownership to Mitsubishi Corporation for about US $4560 million (50 billion yens) reducing its stake to 23% from 43%. (DaimlerChrysler owns 65%.) Mitsubishi Corp and Mitsubishi Motors, both denied this.