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Mitsubishi Reaffirms Commitment to U.S. Market

February 22, 2005

TOKYO — Struggling Japanese automaker Mitsubishi Motors Corp. reaffirmed its commitment to the U.S. market Friday, saying it had no intentions of exiting that market, according to the Associated Press on February 18. The Tokyo-based automaker, which has a car plant in Normal, Ill., denied in a statement that it had ever pursued such a possibility and called "groundless" a report in The Wall Street Journal that said it was seeking a buyer for its U.S. operations. Mitsubishi Motors has announced several revival plans in recent years. It has been hurt by disclosures that it had systematically hidden auto defects from the authorities that spanned decades at the company. The scandal emerged in 2000 but resurfaced last year, and Mitsubishi Motors vehicle sales have plunged in Japan. DaimlerChrysler AG of Germany, which had initially been part of its turnaround effort, decided to end additional financing last year. Mitsubishi Motors has received cash infusions from the Mitsubishi group of companies to fund its comeback. Mitsubishi Motors is expecting a group net loss for the year ending March 31 of 472 billion yen ($4.5 billion), but is planning to return to profit by the fiscal year ending March 2007. It has recently announced minor agreements to make vehicles for French automaker PSA Peugeot Citroen and Nissan Motor Co. of Japan. The Journal reported that unidentified people familiar with the matter said Mitsubishi Motors' new president, Osamu Masuko, traveled to Detroit for an auto show in January to begin talks with potential buyers for its U.S. operations. The report said Masuko was accompanied by Yasushi Ando, head of Tokyo-based investment fund Phoenix Capital Co, which currently holds a 21.2 percent stake in Mitsubishi Motors. It said the two Japanese executives met privately with several industry executives, including representatives from U.S. private-equity fund Ripplewood Holdings LLC. A representative for Ripplewood declined to comment to the Journal. The newspaper said it was told Ripplewood didn't show much interest in the U.S. operations which include Mitsubishi's North American sales unit in Southern California an the assembly plant in Illinois. The Journal said Mitsubishi representatives confirmed that the two executives attended the Detroit auto show, but declined to comment on any meetings and said Mitsubishi has "no plans to withdraw from the North American market."
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