Mitsubishi to Shut Oz Plant for Three Weeks

CANBERRA – Mitsubishi Motors Australia Ltd. will close its Adelaide plant for three weeks from the middle of March.

The beleaguered auto maker has been struggling to sell its new 380 large sedan since it was launched last October at a cost of A$600 million ($443 million). But the car sold only 718 units in January, with its best result 1,650 units in November.

Mitsubishi Australia originally set a sales target of 3,000 units per month for the 380. But that was cut to 2,500 units in January.

Mitsubishi 380 sales continue to fall.

The company recently announced it was reducing production to 27,000 units annually from 30,000 and would cut its assembly staff by 250 through voluntary redundancies.(See related story: Mitsubishi Slashes 380 Sedan Output, Cuts 250 Workers)

CEO Robert McEniry says workers have been told of the plant's production calendar, and scheduled days off later in the year are being brought forward to coincide with holidays to form a 3-week block for the shutdown period.

John Camillo, secretary for the Australian Metal Workers Union South Australian state, tells reporters Mitsubishi workers were handed calendars with the closing dates on them.

"They were told, 'We won't be doing the 380 for the reason that sales are down.’"

Camillo, who appears to lay part of the blame on the influx of inexpensive foreign cars, says he has written to Prime Minister John Howard, urging him to freeze automotive tariffs at the present 10%.

"The state of the industry is a major concern,” he says. “By 2010, Australian tariffs will be the lowest in the Asia/Pacific region, and that is a real worry."

Australia car sales in the last year have shifted to smaller, more economical vehicles. Sales of large cars made by the Big Four domestic auto makers here all are down, primarily due to escalating fuel prices. (See related story: Australian Auto Makers Insist Large Cars Still Relevant )