• The Associated Press


Scandal-plagued Mitsubishi Motors Corp. remains committed to the U.S. market, which is critical for the firm’s turnaround, its new president said Wednesday.

Production capacity at the plant in Normal, Ill., was reduced last year by about half to between 125,000 to 130,000 vehicles a year to boost profitability but there are no plans to sell the plant, said Osamu Masuko, appointed president and chief operating officer a month ago.

MMC has trimmed the plant staff to about 900 workers from around 1,900 last year, according to the automaker. No more job cuts are planned in the United States, Masuko told reporters at MMC’s Tokyo headquarters.

A spate of recall and defect coverups that surfaced five years ago has taken its toll on the automaker, which is expecting a loss of 472 billion yen for the fiscal year as it struggles to revive plunging sales.

The public was stunned when MMC acknowledged it had systematically hidden auto defects for decades to avoid recalls.

It promised to come clean in 2000, but hidden defects warranting recalls resurfaced last year, badly tarnishing its image.

The U.S. plant is now running at a pace of about 100,000 vehicles a year, but Masuko said he hopes to boost that to full-capacity soon by putting the Eclipse on the U.S. market next summer as well as by exporting vehicles to Russia, Ukraine and the Middle East.

“As a single market, North America is an important market for us,” he said.

Masuko denied the company had ever considered selling its U.S. operations or approached potential buyers, as a report in the Asian Wall Street Journal posed on Feb. 18.

He also denied it was thinking about seeking a new partner in the United States and said it was determined to go at it alone, although it will continue to work on projects with DaimlerChrysler AG of Germany as it has in the past.

Masuko promised that MMC will mark a clean break from its past by announcing this month the results of an internal investigation into the defect scandal, including penalties for employees. He declined to elaborate.

He also said a settlement with DaimlerChrysler will be signed this month.

The German-American automaker, which owns a small stake in MMC, had demanded damages for the defect scandal. Masuko refused to say how much was being paid.

Since last year, MMC has announced two massive cash bailouts from the Mitsubishi group of companies to go on with its revival plan after DaimlerChrysler decided to end additional funding and effectively quit its role as a major alliance partner.

Masuko is a 30-year veteran of Mitsubishi Corp. and is the latest in a string of presidents in recent years.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.