Posting huge losses in midterm earnings, Mitsubishi Motors Corp. announced plans Friday to lay off about 1,000 of the 4,600 workers at two major U.S. subsidiaries as part of restructuring efforts.
By 2000, a total of 1,000 workers will be cut at Illinois-based Mitsubishi Motors Manufacturing of America Inc. and the California-based Mitsubishi Motors Sales of America group, MMC President Katsuhiko Kawasoe said at a Tokyo press conference.
The company reported an unconsolidated pretax loss the same day of 18.3 billion yen and a net loss of 28.6 billion yen for the April-September period, and has decided to forgo midterm dividend payments for the first time since the company was listed on the Tokyo Stock Exchange in 1988.
"(The auto industry) is now facing a situation that we have not experienced before," MMC President Kawasoe said, mentioning the serious domestic economic slump and the Asian financial crisis that dampened production by Japanese automakers by 12.1 percent in the first half of this fiscal year.
Kawasoe also said the company will consolidate or streamline manufacturing facilities at Maruko in Tokyo's Ota Ward, Nakatsu in Kanagawa Prefecture, Ooe in Aichi Prefecture and in Kyoto.
Major automakers have formed a number of alliances to survive intensifying competition, and Kawasoe said that MMC has "received a variety of offers from around the world." The company "will proceed with (a proposal) if it is mutually beneficial in that area or geographic region." Kawasoe did not go into details on the offers MMC has received.
As part of the newly announced restructuring plan, the company's nonmanufacturing staff will be reduced from 13,400 to 12,000 by the end of fiscal 1999, according to MMC officials.
To save development costs, passengers car platforms will also be cut in half to six.
MMC's midterm sales shrank 16.2 percent to 1.1 trillion yen compared with the same period last year.