Le point sur Mitsubishi une fois pour toute

TOKYO -- Mitsubishi Motors Corp. will offer one fewer new nameplate in North America than previously planned in the next three years. It also expects to sell fewer cars than it previously targeted.

The company did not say which model it was canceling, but it is expected to be the replacement for the Diamante, Mitsubishi's lowest-volume car. Mitsubishi sold 4,379 Diamantes in 2004 in the United States. Its base sticker is $25,544 including destination.

The changes are part of a new and more modest restructuring plan announced last week. The plan also envisions:

>>> Less aggressive, more realistic cost-cutting targets.
>>> A cash injection from Mitsubishi Group.
>>> New managers, including a chairman shared with Mitsubishi Heavy Industries Ltd.
>>>A one-year delay in returning to profitability, until the fiscal year ending March 2007.

Separately, a Mitsubishi source says talks between Mitsubishi and the Chrysler group about jointly developing a new mid-sized car for Mitsubishi were "dead."

In North America, Mitsubishi plans to launch only one new and one redesigned model in the fiscal year that starts April 1: the Eclipse sporty car and Raider compact pickup. In May it said it would launch three models that year.

Beyond that, though, the timing of new model launches is being accelerated. Mitsubishi plans three new models in the fiscal year beginning April 1, 2006, and one new model the following year. It had planned one in the year beginning April 2006 and three the following year.

Rich Gilligan, new CEO of Mitsubishi Motors North America Inc., said last week that U.S. dealers will get a new seven-seat Outlander SUV for the 2007 model year. He said other new products in the next two to three years are the Eclipse Spyder, Lancer sedan and Lancer Evolution sport sedan.

He also said the Endeavor SUV will be freshened for the 2006 model year, and the Galant sedan be freshened for the 2007 model year.

According to the new forecast, North American sales will rise gradually from an estimated 170,000 in the fiscal year ending March 31 to 218,000 in the year ending March 31, 2008. In May, Mitsubishi predicted North American sales in the year through March would total 233,000.

New leaders

As part of the plan, Mitsubishi Heavy Industries Ltd. Chairman Takashi Nishioka, 68, took over as chairman and CEO of the car company Friday, Jan. 28. He will remain chairman of Mitsubishi Heavy. "Mitsubishi Motors is heavily injured," Nishioka said. "To return to a normal, healthy position will require the support of the Mitsubishi Group."

Mitsubishi Heavy is an industrial conglomerate that makes products ranging from oil tankers to car turbochargers. Mitsubishi Group is a confederation of companies tied by cross-shareholdings. Included in the group are such diverse entities as the Mitsubishi Corp. trading house and Kirin Brewery Co.

Osamu Masuko, 55, the carmaker's managing director in charge of overseas operations, became president and COO Jan. 28. Masuko will remain responsible for overseas operations.

The car company's top three executives resigned. They are Yoichiro Okazaki, chairman and CEO; Koji Furukawa, vice chairman; and Hideyasu Tagaya, president and COO.

Mitsubishi also said it expects to supply Japan-built cars to PSA-Peugeot/Citroen for sale in Europe as Peugeots. PSA Chairman Jean-Martin Folz is scheduled to visit Tokyo in early February for final talks on the deal, Masuko said.

Mitsubishi also will supply minicars to Nissan.

Homecoming

The plan also includes 270 billion yen, or $2.62 billion at current exchange rates, in additional funding for the financially troubled carmaker from the Mitsubishi Group. Led by Mitsubishi Heavy, the group will buy new shares issued by the carmaker. The group will end up with a controlling 34 percent of Mitsubishi Motors.

As of Sept. 30, DaimlerChrysler AG owned 20.7 percent of Mitsubishi Motors. Mitsubishi did not say what DaimlerChrysler's stake will be after the new shares are issued to the Mitsubishi Group.

The arrangement brings the carmaker back under the auspices of Mitsubishi Heavy. It amounts to a homecoming for Mitsubishi Motors. It was spun off from Mitsubishi Heavy Industries in 1970.

"Once you create a product, even 20 years later, you just have to take care of it and protect it, just like a mother," Nishioka said. "Mitsubishi Motors was created by Mitsubishi Heavy Industries."