In a good-news/bad-news development, MITSUBISHI MOTORS CORP.'s Normal, Illinois assembly unit, which has been building vehicles since 1988, posted its first profit ever in the year through March 31, 1998. However, as part of its drive to return to profitability in FY 2000, MMC plans to cut 700 of the 3,900-plus jobs at the assembly plant in addition to trimming 300 from the payrolls of its Cypress, California sales and credit operations, which now employ a total of 1,150 people. Mitsubishi Motors previously had announced that it would merge MITSUBISHI MOTORS MANUFACTURING OF AMERICA, INC. and MITSUBISHI MOTOR SALES OF AMERICA, INC. in the spring of 2000 in an effort to turn around its money-losing North American business (see Japan-U.S. Business Report No. 348, September 1998, p. 8). The automaker's goal is to make MMMA profitable on an annual production run of 160,000 units and to reduce costs enough that the sales arm can make money on a yearly volume of 200,000 units. Both objectives were just missed in 1998. The Normal factory built 157,000 cars, while MMC car and truck sales in the United States totaled 190,500.
In what is said to be a first for a Japanese automotive parts supplier, TOYOTOMI KIKO CO., LTD. will produce service or aftermarket parts in the United States. The Aichi prefecture manufacturer will supply fenders, hoods and other body stampings for TOYOTA MOTOR CORP. vehicles. Work on TOYOTOMI AMERICA CORP.'s $33 million plant in Springfield, Kentucky will begin in February 1999. Full-scale operations are scheduled to start in April 2000 with a work force of 75 people. In 2002, the company expects to be turning out anywhere from $16.5 million to $24.8 million worth of body parts for supply to Toyota service centers. Toyotomi America, which was formed last April, is its parent's first offshore subsidiary.
An exchange rate of ¥121=$1.00 was used in this report.