300 Let Go by Auto Unit
Mitsubishi Motors North America said Friday that its in-house finance arm would lay off most of its Southern California-based workforce as part of a $5.2-billion global restructuring plan aimed at keeping ailing parent Mitsubishi Motors Corp. alive.
Three hundred of the 365 workers at the Cypress headquarters of Mitsubishi Motors Credit of America will lose their jobs in the next six months. The restructuring won’t affect the 565 employees at Mitsubishi Motors North America, the Japanese car company’s sales, marketing and distribution unit, also based in Cypress.
The financial rescue plan announced by Mitsubishi executives in Japan early Friday “will improve mid- and long-term finances with the goal of returning [the company] to profitability in 2006,” said Rich Gilligan, president of Mitsubishi Motors North America. “We see it as a vote of confidence ... to allow us to keep moving forward.”
Additionally, Mitsubishi said it expected to boost production at the company’s sole U.S. manufacturing plant, in Normal, Ill., as part of a plan to begin exporting vehicles made there to markets in Eastern Europe, the Middle East, Asia and Latin America.
The plant, which produces Mitsubishi Eclipse sports cars, Endeavor sport utility vehicles and Galant sedans, has about 2,000 employees -- down from 3,400 at its peak in 2002.
Mitsubishi Motors, which has seen sales in Japan and the United States slump dramatically in recent years, has been on the verge of filing for bankruptcy protection for months.
Company executives in Japan said they had landed 540 billion yen -- about $5.2 billion -- of new investment capital and loans.
At the same time, three of the automaker’s top executives resigned to take responsibility for last year’s failed revival effort.
Takashi Nishioka, chairman of Mitsubishi Heavy Industries Inc., now will take on the chairmanship of the automaker as well. Osamu Masuko, formerly head of overseas operations for Mitsubishi Motors and reportedly a strong supporter of Mitsubishi’s North American operations, will become president.
The cuts in Cypress follow Mitsubishi’s announcement last fall of a joint automotive financing venture with Merrill Lynch & Co. under which tasks such as processing loan applications will be done by an outside company.
