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Mitsubishi cuts jobs at only U.S. plant

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| Wednesday, July 21, 2004 11:54 PM CDT | () comments

Associated Press

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 automaker, battling losses from bad credit and recall scandals, said production will be cut from two shifts to one in October at the Normal plant, which now has more than 3,100 workers.

Finbarr O'Neill, chairman and chief executive officer of Mitsubishi Motors North America, said production had to be adjusted as the company tries to rebuild sales that have dipped nearly 27 percent in the U.S. for the first six months of 2004.

The head of an auto industry watchdog group said layoffs were the company'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, of the Michigan-based Center for Automotive Research.

Ralph Timan, president of United Auto Workers Local 2488, said in a statement that 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 guidelines for the layoffs and possible severance packages had not been determined.

While Mitsubishi has not set a production target for the Normal plant, the highly automated factory will only be able to build 140,000 cars a year with the reduced work force, down from the current 180,000, Irvin said.

Officials said the layoffs will be a blow to the local economy, but predicted the cuts can be absorbed by a diverse economy where Mitsubishi was second to State Farm Insurance's 12,000 employees among Bloomington-Normal employers.