As for Australia, MMC can't guarantee its Adelaide plant could stay in business past 2011, and announced it would reduce capacity by more than half to 30,000 units per annum from its current 62,000 unit yearly production. While this sounds like a major setback, the Tonsley Park plant only produced 32,000 cars the previous year. The automaker will also shutter its engine plant in the 2005/2006 business year.
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| The long-term future of MMC's production plant in Adelaide, Australia is a big question mark. (Photo: Shawn Pisio, Canadian Auto Press) |
"In our business -- for anyone in the auto industry -- it is not possible to guarantee the future seven years ahead," CEO Yoichiro Okazaki told a news conference.
No doubt, the Australian's government's contribution of USD$35 million kept the Adelaide plant in operation, part of Prime Minister John Howard and Industry Minister Ian Macfarlane's requirement for putting up the funds. Such tactics are nothing new between the two organizations mind you, with the Australian government having put up USD$85 million only two years ago to keep the plant in operation.
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| It will cost MMC AUD$600 million to upgrade the Adelaide plant for production of the new Diamante. (Photo: Mitsubishi Motors North America ) |
"While Mitsubishi's commitment to the new locally produced model is a very welcome development, the decision on the Lonsdale plant and the workforce reductions will come as a great blow to many of Mitsubishi's workers and their families," Howard said in a statement.
In the two Australian plants MMC employs about 2,700 people, 700 which will be losing their jobs when the engine plant closes.
"Given the pressures on the global Mitsubishi business, the final outcome for Adelaide had the potential to be far worse," Macfarlane said in a statement.