PDA

View Full Version : bad news for mitsubishi



roywhitep5
04-22-2004, 10:00 PM
not sure if this has been posted but i just read it on the protege forums
----------------------------------------------
DaimlerChrysler to quit Mitsubishi

Reuters / April 22, 2004


STUTTGART, Germany -- DaimlerChrysler AG said on Thursday it was pulling out of Mitsubishi Motors, leaving its bid to become a global carmaker in disarray and throwing the future of the ailing Japanese firm into doubt.

The group said that it had decided not to participate in a rescue capital increase planned by Mitsubishi Motors Corp. because it could not agree on an acceptable deal with other shareholders in the loss-making company.

It also said it would not provide any further financial support to Mitsubishi, Japan's only unprofitable carmaker.

"This clearly means separation," a DaimlerChrysler spokesman said, adding that the 37 percent stake would be booked as discontinued business until a buyer could be found.

Mitsubishi representatives could not immediately be reached for comment.

The decision came after an extraordinary meeting of the DaimlerChrysler supervisory and management boards on Thursday.

Supervisory board sources said earlier that the company had discussed selling its 10 percent stake in South Korea's largest carmaker Hyundai Motor Co. Ltd., worth about 850 million euros ($1 billion), to help fund the Mitsubishi rescue.

Mitsubishi, Japan's fourth largest and only unprofitable carmaker, had been planning to present details of a 700 billion yen ($6.39 billion) bailout to shareholders on April 30.

Reeling from losses generated by a disastrous strategy of offering cheap car loans in the U.S., Mitsubishi is expecting a net loss of 72 billion yen for the 12 months to March 31. It had a profit of 37.36 billion yen the previous year.

Mitsubishi Motors' net automotive debt stood at around 726 billion yen six months ago, while total interest-bearing debt was 1.141 trillion.

"This could be the end for Mitsubishi if nobody else injects fresh capital," said one industry source.

DaimlerChrysler bought the stake in Mitsubishi over three years ago with a view to expanding its presence in Asia. It has since worked to establish closer production ties between the Japanese firm and its other problem child, U.S. automaker Chrysler, to cut costs.

BluEvo
04-22-2004, 10:11 PM
is that why Mitsubishi isn't getting their all their 2004's in yet??? i spoke with some of my contacts at the Mitsu dealership and they said they were suppose to get all these 2004 cars/suvs in, but they haven't yet??? huh?? :?

vtluu
04-22-2004, 10:16 PM
Read a related story at http://www.nytimes.com/2004/04/23/business/worldbusiness/23daimler.html :


Daimler Says It Won't Bail Out a Partner, Mitsubishi Motors

By DANNY HAKIM
Published: April 23, 2004

DETROIT, April 22 - DaimlerChrysler will not bail out its struggling partner, Mitsubishi Motors, putting a cloud over the Japanese automaker's future.

DaimlerChrysler, the largest shareholder in Mitsubishi Motors, with a 37 percent stake, said in a brief statement released in Germany late Thursday that it had decided not to pump cash into the company to keep it solvent.

The development is a serious setback to the strategy of DaimlerChrysler's chief executive, Jürgen Schrempp, to create a global automotive giant. And it could be a major blow to the recovery strategy of the Chrysler Group, one of the traditional Big Three domestic automakers. A central element of Mr. Schrempp's plan was to cut costs by having Chrysler and Mitsubishi develop vehicles jointly, including small- and midsize cars and pickup trucks.

"We wanted to combine, to a large extent, engineering of Chrysler with Mitsubishi Motors," Mr. Schrempp said in December, testifying in a lawsuit over the terms of the 1998 combination of DaimlerBenz and Chrysler. He added that sharing development processes at the two companies "means a tremendous cost effect, positive cost effect for Chrysler."

David Healy, an analyst at Burnham Securities, said Thursday that Mitsubishi and Chrysler were far along in developing new cars together. "I suspect it would be difficult, expensive and time consuming to untangle that relationship," Mr. Healy said. Referring to Chrysler, he said, "If they had to do it alone, it would mean a higher initial investment, higher overhead and higher tooling costs. So it reduces the profit potential, or increases the loss potential for those vehicles."

The decision not to prop up Mitsubishi was reached Thursday at a special meeting of DaimlerChrysler's executives, led by Mr. Schrempp, and its supervisory board at its headquarters in Stuttgart, Germany.

"Substantial financial resources are required to guarantee a sustainable financial recovery," Daimler said in its statement, adding that those resources would not be coming from Daimler.

[Mitsubishi Motors said in a statement early Friday in Japan that it had been informed of DaimlerChrysler's decision, but that DaimlerChrysler had not indicated to Mitsubishi that it intended to change its current holdings.

["Mitsubishi Motors is currently evaluating the situation," the company said in the statement, declining further comment.]

A major shake-up of Mitsubishi's' management has been expected since early this year, when Andreas Renschler, the head of DaimlerChrysler's Smart car subsidiary and one of Mr. Schrempp's top lieutenants, was sent to Tokyo to draft a new turnaround plan for Mitsubishi.

But DaimlerChrysler's move to distance itself from Mitsubishi Motors surprised Mitsubishi executives in Tokyo, who had been expecting Mr. Renschler to succeed Rolf Eckrodt, their current chief executive. Mr. Eckrodt was sent from Stuttgart four years ago to lead Mitsubishi Motors when DaimlerChrysler first took a major stake. A close associate of Mr. Eckrodt said that he had been planning to retire.

The Mitsubishi Corporation, a trading company, and other companies in the Mitsubishi Group together own more than a quarter of Mitsubishi Motors. Over the last few months, Mr. Renschler and other DaimlerChrysler executives have been negotiating with the Mitsubishi Group and with lenders over a bailout plan. The future of Mitsubishi Motors now depends on the Mitsubishi Group, but it is not clear whether it is willing to shoulder the necessary investment alone. Estimates of the amount of new money being discussed range from 200 billion yen to 800 billion yen ($1.8 billion to $7.3 billion). Mitsubishi Motors badly needs the money to develop new models and arrest a sharp slide in sales in the United States.

The company's American operations have been posting huge losses, in part because its strategy of increasing sales by offering easy credit terms to young buyers backfired when many customers defaulted on their car loans. The problems forced Mitsubishi Motors to widen its forecast net loss for the year that ended March 31 to 72 billion yen from 11 billion yen.

Mitsubishi's vehicle sales in the United States fell 25 percent last year and by another 19 percent in the first three months of 2004.

Mr. Eckrodt's efforts to turn Mitsubishi around in the last three years have been severely hampered by a string of recalls in Japan and subsequent questions about the quality of the company's vehicles.

Recently, an affiliate, Mitsubishi Fuso Truck and Bus, had announced a recall after a series of accidents caused by wheels flying off moving vehicles. In one widely reported case, a young woman was struck and killed by a runaway truck wheel. Mitsubishi Fuso was a division of Mitsubishi Motors in 2002, when the accidents occurred; it later sold much of its stake to DaimlerChrysler, which owns 65 percent of the truckmaker.

Mitsubishi's image was badly tarnished in Japan in the summer of 2000 when it acknowledged that it had hidden problems with its vehicles to avoid costly recalls.

Todd Zaun, in Tokyo, contributed reporting for this article.

roywhitep5
04-22-2004, 10:37 PM
i hope mitsubishi can recover

EvoVIII
04-22-2004, 10:46 PM
Hope mitishubi can't recover, so our Evo8 will be Limited Edition and there will be no more Evo9 ahahaahaa and the Evo MR won't be able to come to the US :twisted:

methods4
04-22-2004, 10:49 PM
Skurry stuff. :?

GReddy_917
04-23-2004, 06:36 AM
Mitsubishi can lick my nuts...I have my EVO and thats all I need.

evo_dadi
04-23-2004, 07:10 AM
Mitsubishi can lick my nuts...I have my EVO and thats all I need.

lol :werd: :buds:

uhoh_evo
04-23-2004, 08:34 AM
Hope mitishubi can't recover, so our Evo8 will be Limited Edition and there will be no more Evo9 ahahaahaa and the Evo MR won't be able to come to the US :twisted:

:werd: i hear you.

everybody start buying (or bootlegging, whatever your preference :wink:) those repair manuals becuase then there won't be anymore dealerships to fix future mechanical problems.

and my family was telling me how the value of the evo would depreciate so much over time. i knew investing in an EVO was a smart choice! :lol:

Tri-Bar
04-23-2004, 09:03 AM
Ok, If they fail, Who will build the parts we need to repair our cars? Just a thought.

nebolic
04-23-2004, 09:18 AM
okie if you guys are worried that mitsubishi is going to fold, you won't have to worry. The japanese government just won't let that happen since its a big part of the japanese economy. If you weren't aware, during the years before the World War, the Japanese government basically had a system of "selective markets" which means that it basically gave rights to certain companies to control the market, so that means they handed out portions of the market to companies to create a oligopoly (few producers in the market). Mitsubishi is one subsidary that was handed out this "preference" and it's also one of the oldest owned company in Japan. Basically if mitsubishi fails, the economy of Japan will be squished a bit and its not what they want right now. If really nobody comes in to inject capital in the ailing company, they will just do a debt restructing, default on the some loans and the japanese government will jump in and do the rest. I highly doubt that Mitsubishi will ever fold, they might restructure and downsize, but they will not stop producing cars.

my 2 cents.

Nebo

P.S however, in the next few years, the cars mitsu produces probably won't be too glamarous and they might go back to the basics and produce cars that are making money. When they are talking about producing limited models, they aren't specifically talking about the U.S market, look at the european market, Mitsu produces so many Mid-Size SUV's it's insanely stupid because they're competing against themselves...

Oh yeah they also need to bring back the eclipse, a 2 door fun to drive car.

vtluu
04-23-2004, 09:19 AM
Just when you were looking for an excuse to get aftermarket parts (instead of OEM ones)... ;)

Kidding aside, I think there are plenty of spare parts for our Evos sitting in warehouses somewhere. And I'm pretty sure the consumer protection laws and people here would see to it that someone would fulfill the warranties on our cars.

Anyway, what with the number of Evos being wrecked out there, there should be plenty of sources of llightly-used OEM parts you can pull. :roll:

04-23-2004, 10:59 AM
Mitsubishi is the only Japanese car maker who is not profitable. Which makes sense, the only car I would buy from them is an EVO. But selling 4K-5K units per year, won't support a global operation.

As far as a Japanese Government based bailout. $6.4 Billion is a bit much for any economy to cover. Especially an economy that has been in a recession/depression for that last 11 years. And there is no guarantee that after the bailout, that they will be profitable and can pay back that loan.

Better stock up on a few spare evo parts.

nebolic
04-23-2004, 02:19 PM
money is not a problem to the government. U.S government bailing out the big airlines here..... honestly, I highly doubt they will go out of business.

lambtron
04-23-2004, 04:41 PM
i have a mitsubishi tv.

vtluu
04-23-2004, 04:45 PM
i have a mitsubishi tv.
Mitsubishi Motors doesn't make your TV. :P

nebolic
04-30-2004, 08:52 AM
http://news.com.au/common/story_pag...55E2682,00.html

just to re-iterate what I said before, a planned bailout by the big guys in Japan is underway so things are looking a bit better and brighter for Mitsubishi Motors.