SA: Mitsubishi s future to be detailed soon

AAP General News (Australia)
02-01-2001
SA: Mitsubishi s future to be detailed soon

By Tim Dornin, National Motoring Correspondent

ADELAIDE, Feb 1 AAP - The manufacturing future of Mitsubishi Motors Australia Ltd (MMAL)
could be decided over the next few weeks.

The giant DaimlerChrysler automotive group, which now controls Mitsubishi in Japan,
plans to outline its new global strategy on February 26.

And leading up to the major announcement MMAL managing director Tom Phillips will present
his company's business plan to senior Mitsubishi officials in Tokyo, with two days of
meetings scheduled for February 12 and 13.

Mr Phillips will outline the general strategy designed to lift vehicle production in
Adelaide to 60,000 units, including 30,000 for overseas markets.

The company hopes to sell 20,000 of those export cars in the United States with the
rest going to the Middle East.

He will also spill the beans on the company's financial losses for 2000, although the
ballpark figure is already known in Japan.

MMAL is expected to report a record loss for last year with the company sinking into
the red by something less than $200 million.

About $100 million of that is due to exchange rate difficulties following the fall
in the Australian dollar while about $50 million was spent on redundancy packages following
Mitsubishi's major restructuring last year.

What the business plan won't include is a recommendation on what vehicle should be
built in Adelaide from 2005, when the current Magna/Verada range is due to be replaced
by an all-new car.

Company spokesman Kevin Taylor told AAP today that the various options for a replacement
product were still being considered and the issue of what DaimlerChrylser had in store
for Australia could also influence the final decision.

But he said the vibes coming out of both Japan and Europe were very positive.

"All the noises are that they (DaimlerChrysler) want to use us," Mr Taylor said.

"But, at the moment, we've no idea how."

Among the options could be to build another Magna-style car in Adelaide for both domestic
and export markets and then add a Chrysler model as a second line.

But rumours have also focused on DaimlerChrysler using Mitsubishi plants around the
world for the development of small cars for all world markets, offering Australia the
opportunity to get a slice of that action.

A third option could be for some new type of crossover car, a four-wheel-drive with
the styling of a traditional sedan or wagon, while the idea of Adelaide producing a larger
Chrysler car which could be badged as a Mitsubishi here but sold as a left-hand-drive
Chrysler overseas has also been suggested.

Mr Taylor said he was unsure just how much information would be revealed later this
month and it could be until further into March before all the details were known.

Whatever the result, Mitsubishi officials in Adelaide remain upbeat about the company's
future as a local producer, pointing particularly to the $172 million extended to the
struggling operation by Japan late last year.

Although most of that money went to reduce debt, some was also used on plant upgrades,
particularly to allow the company to bid for export sales to the Middle East which will
now start later this year.

Such steps were unlikely to be have been approved if the longer-term plan was to close
the Adelaide factories down.

Also hoping to ensure a strong manufacturing future for Mitsubishi, South Australian
Premier John Olsen will hold talks with senior company officials in Japan next week, his
trip designed to ensure the company knows it has the support of the state government.

Opposition Leader Mike Rann also chimed in today, urging the premier to remind Mitsubishi
of the bi-partisan support it enjoys in SA.

AAP tjd/pc

KEYWORD: MOTOR MITSUBISHI (CARRIED EARLIER)

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