Mitsubishi axing 6,000 jobs

Japanese vehicle maker Mitsubishi is to cut about 6,200 jobs from its global work force and receive €3.4bn in funding from the Mitsubishi group and other investors in a revival plan, the company said in Tokyo.

Under the plan, Mitsubishi Motors will keep its US plant in Illinois open and will target an overall sales increase over the next three years, the company said in a statement.

The job cuts will reduce the company’s global work force from 44,400 to 38,200, officials said.

Mitsubishi employs workers in factories and offices in Japan, the United States, Europe and Australia.

Mitsubishi Motors said it plans to close an engine plant in Australia next year but will leave open a passenger car plant there. The company will close a passenger car plant in the southern Japanese city of Okazaki in fiscal 2006.

The vehicle maker, burdened with more than €7.4bn in debt, plunging car sales in Japan and a spate of recalls, was dealt a serious blow by a surprise announcement last month by US-German carmaker DaimlerChrysler that it would not provide a fresh cash infusion.

DaimlerChrysler owns 37% of Mitsubishi Motors.

But the Mitsubishi conglomerate has promised to stand behind the vehicle maker. The group includes Mitsubishi Heavy Industries, which owns a 15% stake, trading company Mitsubishi Corporation, which holds 5%, and Bank of Tokyo-Mitsubishi, which has 3%.

Mitsubishi Motors is currently under criminal investigation for possible defect cover-ups.

Yesterday, Mitsubishi Fuso Truck and Bus Corporation, which was spun off from the vehicle maker, acknowledged that defects had probably been concealed and announced a recall of 180,000 trucks.