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News :: Economy : Globalization : Labor |
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Mitsubishi to Lay Off 1, 200 Bloomington, Ill. Workers |
Current rating: 0 |
by via AP
(No verified email address) |
21 Jul 2004
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Ralph Timan, president of United Auto Workers Local 2488, said the union will work with Mitsubishi to keep the company ``financially viable while also making sure the least number of members are affected by this news.'' |
NORMAL, Ill. (AP) -- Mitsubishi Motors will lay off 1,200 workers this fall at its only U.S. plant, trimming car production as part of a worldwide revival plan the automaker hopes will pare mounting debts, the company announced Wednesday.
The Japanese automaker, battling losses from bad credit and recall scandals, said production will be cut from two shifts to one in October at the Normal, Ill. plant, which now has more than 3,100 workers.
Finbarr O'Neill, chairman and chief executive of Mitsubishi Motors North America, said production had to be adjusted as the company tries to rebuild U.S. sales that have dipped nearly 27 percent in the first six months of 2004.
Rich Gilligan, president and chief operating officer of MMNA's Manufacturing Division, said in a statement: ``This was a very difficult decision, but we believe it is necessary for the long-term success of the company.''
The head of an auto industry research agency said job cuts were Mitsubishi's only option as sales plunged.
``It's a difficult decision, but it's not a hard one to make. If the market isn't there, the only thing you can do is take costs out,'' said David Cole, president of the Michigan-based Center for Automotive Research.
Ralph Timan, president of United Auto Workers Local 2488, said the union will work with Mitsubishi to keep the company ``financially viable while also making sure the least number of members are affected by this news.''
Plant spokesman Dan Irvin said workers were notified Wednesday, but that guidelines for the layoffs and possible severance packages had not been determined.
Cole said Mitsubishi faces an uphill battle in a worldwide auto industry that can produce 70 million to 80 million cars a year, but has only 50 million to 60 million buyers.
``They're in a tough spot. It's a survival-of-the-fittest world out there,'' Cole said.
Rumors of job cuts have swirled at the plant since May, when Mitsubishi announced a reorganization plan to pare a $9 billion debt fueled by bad credit and recall scandals.
Worldwide, the plan will slice nearly 11,000 jobs over three years -- nearly a quarter of Mitsubishi's global work force -- and close plants in Japan and Australia.
The reorganization plan, which chief executive officer Yoichiro Okazaki called ``our last chance to survive as an automaker,'' also includes a $4 billion infusion from its parent company and other investors.
Mitsubishi's sales have plunged amid recall scandals in Japan and a zero-percent financing strategy in the United States that backfired when many borrowers defaulted on their payments.
Production has dipped more than 22 percent through June at the Normal plant, which produces the Galant, Eclipse and Endeavor for Mitsubishi and the Dodge Stratus and Chrysler Sebring. Mitsubishi's deal to build cars for partner DaimlerChrysler expires in 2005 and will not be renewed, according to the companies.
The Normal plant built 53,174 during the first half of 2004, down from 68,537 during the same period a year ago, the company reported.
Mitsubishi has trimmed production, workers and halted a planned expansion project since once-rising sales began to dip in mid-2003.
Layoffs -- the first at the plant since 1999 -- cut 52 nonunion jobs and 225 union positions earlier this year. The company also put a $200 million expansion project on hold last fall. The addition, announced when the company was logging record sales early last year, would have added 300 jobs.
Copyright 2004 The Associated Press
http://www.ap.org/ |
Copyright by the author. All rights reserved. |
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Re: Mitsubishi to Lay Off 1, 200 Bloomington, Ill. Workers |
by ijustkrushalot
uiuc.edu (unverified) |
Current rating: 0
21 Jul 2004
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uhg... bad news for the B/N area.... the so-called "recession-proof" McLean county area is taking a big hit from cutbacks at Mitsubishi and stalled expansion at State Farm.... |
