(AP) Mitsubishi to cut 11,000 jobs

[kostby]

From the Toronto Star:Ailing Mitsubishi Motors to idle plants, cut 11,000 jobsTargets slashing 22 per cent of global workforceAuto maker to get $5.5 billion cash from investorsYURI KAGEYAMAASSOCIATED PRESSTOKYO—Japanese auto maker Mitsubishi Motors Corp., struggling to survive, says it will cut nearly 11,000 jobs, or 22 per cent of its global workforce.The company also plans to close an assembly plant in Japan and receive an infusion from investors of 450 billion yen, which was worth about $5.5 billion (Canadian) at yesterday's exchange rate. Mitsubishi Motors, under what it yesterday called the "last chance" plan, will keep open a U.S. plant in Normal, Ill., but will shutter an engine plant in Australia while keeping a passenger-car plant there. The company will close a passenger car plant in Okazaki in fiscal 2006.The auto maker, burdened with more than 1 trillion yen in debt, plunging car sales and a spate of recalls, also reported a much steeper than expected loss for the fiscal year ended March 31.Mitsubishi Motors was dealt a serious blow by a surprise announcement last month from U.S.-German DaimlerChrysler AG that it would not provide a fresh cash infusion. "This is our last chance to continue as an auto maker," said Mitsubishi Motors chief executive officer Yoichiro Okazaki.Standing before a packed room of reporters at Tokyo headquarters, Okazaki apologized and bowed deeply to the families of the two people who had died in 2002 accidents, suspected of being linked to defects in wheels and clutches of Mitsubishi trucks, resulting in thousands of vehicles being recalled this year.The proposed job cuts will reduce Mitsubishi Motors' global workforce to 38,200 by April, 2007, from the current 49,100, officials said.Mitsubishi Motors, which employs workers in factories and offices in Japan, the United States, Europe and Australia, did not give a regional breakdown of the job cuts.Under the plan, DaimlerChrysler's stake in Mitsubishi Motors will be diluted to 22 or 23 per cent from the current 37 per cent, but officials said alliance projects will continue, such as the joint development of small cars and engines.The top shareholder will be Phoenix Capital, which is affiliated with the Mitsubishi group, at about 40 per cent. The Mitsubishi conglomerate is also contributing money.Also yesterday, Mitsubishi Motors said it had fallen deeper into the red than the company's forecast for the fiscal year ended March 31, posting a net loss of 215 billion yen, compared with a 37 billion yen profit the previous year. I guess "0%/$0 down/0 payments for a year" leads to "11, 0-0-0" job cuts!

[ragingfish]

I would venture to say Mitusbishi will go the way of Plymouth and Geo say, by, 2006...at the latest...

[cohocarl]

It's interesting they are keeping the U.S. plant open.

[MadBill]

Besides lying about warranty problems, a big part of their trouble was the aforementioned wildly generous finance deals, combined with inadequate background checks on their customers, causing every deadbeat in the country to sign up for an essentially free car for a year and then walking away when the first payment was due...

[Stang2Vibe]

Oh man, who in the world thought that deal out?I never really followed this closely and until now I had no clue that Mitsubishi was in such trouble.