Business

METI to guarantee loans to MMC units

The Ministry of Economy, Trade and Industry said Tuesday it will support cash-strapped affiliates of scandal-hit Mitsubishi Motors Corp. by offering them guarantees to receive more loans.

Industry minister Shoichi Nakagawa told a news conference that the program will enable small and midsize companies to receive guarantees from credit-guarantee associations across Japan for loans of up to 560 million yen, including 160 million yen without collateral.

The measure will be retroactive to May 21 and will be valid for one year to next May, seeking to assist subcontractors and dealerships with close ties to MMC, according to ministry officials.

Nakagawa voiced hope that local governments will hold business meetings to offer new transaction opportunities for MMC affiliates, as well as map out employment measures to help workers dismissed as a result of the automaker’s restructuring plan.

Under the new program, guarantees offered by the associations will be doubled for small firms facing a crisis from the existing regular credit line of up to 280 million yen.

The ministry estimates there are 170 MMC-related dealerships and 2,300 vehicle-parts manufacturers and transporters nationwide.

Entities that are expected to see their sales drop more than 10 percent in a three-month period from May 21 from the previous year, along with those that have more than 20 percent of their transactions with MMC, are eligible for the safety-net insurance.

Employee deal eyed

Mitsubishi Motors Corp. said Tuesday it has formally asked Toyota Motor Corp. to hire some of those who work at the MMC assembly plant in Okazaki, Aichi Prefecture.

Mitsubishi officials said the two carmakers will work out details of the plan by the end of July.

Mitsubishi will shut down the 1,600-worker Okazaki plant by the end of 2005 as part of a restructuring drive aimed at turning around the automaker’s business. The firm has been bludgeoned by a series of defect coverups and recalls.

Toyota and its group firms are reportedly eager to hire some experienced Mitsubishi workers for their factories in Aichi Prefecture.

Toyota’s global marketing activities are faring well, leading its domestic factories to operate at full production capacity. This in turn has led to a shortage of highly skilled workers at Toyota.

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