ADELAIDE, Australia (AP) — Mitsubishi executives said Tuesday that the Japanese automaker's Australian plant will be closed, with the loss of 930 jobs.
Mitsubishi Motors President Osamu Masuko said in a statement the closure ''is necessary in order to meet the changing market environment and to ensure continued and sustainable growth in our business activities in Australia.''
Mitsubishi Australia President Rob McEniry told workers Tuesday that their plant in the southern city of Adelaide would close in March. He told reporters that staff were given the rest of the week off but would return to work Monday.
McEniry said production of the 380 model sedan manufactured there would be discontinued and the company would sell only imported vehicles in Australia.
The decision was forced on the company by a series of issues, including accumulated losses of more than 1.5 billion Australian dollars (US$1.36 billion; euro919 million) over the past 10 years, he said.
He said the company had also struggled to sell the 380 model — sold as the Galant in the U.S. — in a declining large car market, while the impact of exchange rates on exports had also been severe.
''The management of both MMC (Mitsubishi Motor Corp.) and Mitsubishi Australia concluded the only viable, the only commercially responsible and the only sustainable future for the brand in Australia that would allow us to grow and be profitable was to pursue a full import business strategy,'' McEniry said in a media conference in Adelaide.
He said 930 jobs would be cut and another 280 jobs in associated industries could also be lost.
Industry Minister Kim Carr said the company would repay a A$35 million (US$45 million; euro31 million) loan to the South Australia state government and pay the employees their full entitlements.
''It's a very say day. I'm very, very disappointed that this decision has been made,'' Carr told Sky Television.
''This has very seriously consequences for nearly 1,200 workers directly either employed by Mitsubishi or suppliers to Mitsubishi,'' he added.
Carr said his government, the state government and the company would contribute to A$50 million (US$32 million; euro21 million) fund to attract investment to region and provide counseling to those who lost their jobs.
The struggling automaker's Adelaide plant, which has been running at a third of its production capacity, rolling out some 10,000 vehicles last year.
''We are discussing the future direction of our Australian operations within the company, and will make an announcement as soon as a decision is made,'' said Kai Inada, spokesman for Mitsubishi Motors Corp. in Tokyo.
Inada confirmed the company board was meeting Tuesday. The automaker is set to outline a business strategy before the end of this fiscal year March 31.
Mitsubishi Motors, whose image has been battered by a defect cover-up scandal, has been struggling for years and turned a profit last fiscal year for the first time in four years.
In the latest setback, it is embroiled in a US$25 million product liability lawsuit in the U.S., which opened Monday.
In that lawsuit, filed in the Circuit Court in Palm Beach County, Florida, Mitsubishi Motors is being accused of neglecting a seat belt defect that may have caused the 2004 death of Scott Laliberte, 25, in a rollover accident of a Montero sport utility vehicle.
