AUTO INDUSTRY NEWS

Mitsubishi Motors Corporation confirms closure of US plant

Mitsubishi Motors Corporation confirms closure of US plant image

Text: Marcus De Guzman / Photos: Mitsubishi | posted July 28, 2015 16:58

Mitsubishi Motors to continue selling cars in the US by importing vehicles

Mitsubishi Motors Corporation (MMC) has confirmed the closure of its only US factory as the automaker recently made an official statement regarding the matter.

The company's official American distributor, Mitsubishi Motors North America Inc. (MMNA) stated that they are currently preparing to end production of the Outlander Sport (ASX) at its Normal, Illinois plant by the end of November 2015. Assembling of the Outlander Sport will be transferred to the company's Okazaki plant in Japan though the final decision has yet to be decided by MMC's Board of Directors on July 30.

"This difficult decision follows years of challenge to remain viable, and was compelled by the combination of insufficient U.S. sales and low production capacity utilization. We greatly value the work of all of our employees in Normal and want to stress that our motivation to exit from this facility is unrelated to labor costs or our relationship with the UAW. Our partnership over the years has been both respectful and mutually beneficial. Our primary focus right now is to work together to identify a strategic buyer for the plant in order to transit into next phase," said Hiroshi Harunari, executive vice president in charge of overseas operations for Mitsubishi Motors Corporation.

MMNA will begin to look for a buyer for the soon-to-be sold factory with help from United Auto Workers (UAW). In addition, the company will also be busy for the next few weeks in helping the workers get new job opportunities under new management.

“In the coming days, weeks and months, our focus will be on helping the hard-working men and women at Mitsubishi Motor's plant transition to new job opportunities under new ownership,” said Ron McInroy, Director of UAW Region 4.

Mitsubishi Outlander Sport

The factory first opened back in 1988 as Diamond Star Motors ( DSM, later renamed to Mitsubishi Motors North America) which was a joint venture between the Japanese automaker and Chrysler. It then became a wholly-owned subsidiary of MMC in 1991 after the company bought all DSM shares owned by Chrysler.

In 2000, the factory produced as much as 222,000 units but faced a steep decline in production units due to the end of OEM supply to Chrysler along with the economic crisis. Production volume went as low as 18,500 units by 2009.

However, production at the factory went up again in 2012 with the introduction of the Outlander Sport. As the plant was the designated supplier for the markets of North America, Middle East, Latin American and Russia, the Outlander Sport managed to increase volume production to 70,000 units. Even with its production icnrease, it was still considered to be too low compared to other plants in the US.

With the recent Russian economic crisis, production at the factory took a hit once again as the Russian market accounted for 30% of the total production volume. This was attributed as one of the main reasons for MMC's decision to shut down and sell the plant.

MMNA stressed that sales operation of the company in the US will continue as they anticipate the US market's continuing growth in the future.