Mitsubishi going out of buisiness?

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via autonews.com

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.

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continued…

ASIA STRATEGY UNDER REVIEW

His finance chief said he saw no reason for an immediate writedown of the Mitsubishi stake, whose market value is roughly equivalent to book value at the end of 2003, but could not specify the decision’s impact on 2004 results.

Group strategy in Asia would be reviewed, he added, but cooperation between Mitsubishi and the group’s U.S. Chrysler unit on new vehicle development and production would continue.

“As far as our Asian strategy is concerned – in which MMC was a major cornerstone – we’ll reconsider what has to be changed and what can or cannot be adjusted,” he said.

“Chrysler can continue with its product plans and also with its production facilities as before. There is no reason why we should change that.”

DaimlerChrysler sources played down suggestions of a boardroom rebellion against Schrempp, saying he had initiated the move to walk away from Mitsubishi Motors after failing to win enough support from fellow shareholders for a capital hike.

The news took the three main Mitsubishi group firms – Mitsubishi Corp., Mitsubishi Heavy Industries and Mitsubishi Tokyo Financial Group – by surprise but they vowed to continue their support for Mitsubishi Motors, the main flagbearer of the group’s 120-year-old three-diamond logo.

NEW BUSINESS PLAN

Mitsubishi Motors and the three group companies said they would create a restructuring team under the automaker’s newly appointed chairman, Yoichiro Okazaki, to craft a new medium-term business plan over the next month.

“They may be able to scrape together enough aid money to see Mitsubishi Motors through the next year or two, but the automaker will need more capital from outside,” said Tatsuo Yoshida, a Tokyo-based auto analyst at Deutsche Securities.

“It would be very difficult for Mitsubishi Motors to survive on its own.”

Japanese government officials also expressed concern.

Ratings agency Standard and Poor’s added to Mitsubishi Motors’ woes, slashing its long-term credit rating by three notches to CCC-, or three notches above default status. Moody’s put the firm’s senior debt on review for possible downgrade.

The automaker had been expected to seek shareholder approval on April 30, for a 700 billion yen ($6.4 billion) bailout.

Sources and media reports had said DaimlerChrysler would fund more than half of that, with plans to consolidate the Japanese company in its books within a few years. Mitsubishi group firms were expected to provide more than 100 billion yen.

Reeling from losses on a sales campaign in which it offered easy credit to U.S. car buyers, the maker of the Pajero sport utility expects a net loss of 72 billion yen for the 12 months to March 31. It had profit of 37.36 billion the previous year.

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

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:eek: joining olds & the F-BODY!!!

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eh…who cares,mitsu has nothing to offer anyways besides the EVO…

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more from USA TODAY

DaimlerChrysler won’t save Mitsubishi after all

By David Kiley, USA TODAY
DETROIT — DaimlerChrysler said Thursday that it will not proceed with a bailout of Mitsubishi Motors, putting the future of the financially ailing Japanese automaker in question.

DaimlerChrysler owns 37% of Mitsubishi, and officials said last week it planned to lead a $6 billion-plus bailout that would increase its stake to more than 50% by 2007.

But talks this week among the German-American automaker, Mitsubishi and its Japanese creditors broke down.

“DaimlerChrysler has decided not to participate in a capital increase planned by Mitsubishi Motors Corp. and to cease further financial support for MMC,” the company said in a statement.

Reuters quoted a DaimlerChrysler spokesman as saying that the company would book its stake as discontinued business until a buyer could be found.

Mitsubishi has been one leg of a global growth strategy by DaimlerChrysler Chairman Jürgen Schrempp. It was to provide a stronghold in Asian markets, especially China, for mass-market cars and trucks.

DaimlerChrysler also owns 10% of South Korean carmaker Hyundai and had been hoping to meld some of the worldwide production, purchasing and development of Hyundai and Mitsubishi with that of Chrysler and Mercedes-Benz where it made sense.

In addition, Mitsubishi has been developing small and midsize cars, as well as an engine, with Chrysler Group.

Chrysler Group spokesman Jason Vines said it was too early to tell how Thursday’s action would affect those projects.

Mitsubishi is the only unprofitable Japanese automaker. It is struggling in the USA after previous management drove sales with high-risk loans to under-qualified buyers.

Mitsubishi expects to post a loss of $686 million for the year ended March 31. That would bring the company’s losses over seven years to $3 billion.

Industry analysts have said they doubt Mitsubishi can survive independently without DaimlerChrysler, and there have been no other companies showing interest in buying it.

David Healy, Burnham Securities auto industry analyst, said it appears as if DaimlerChrysler’s board “finally rebelled against Schrempp’s pouring money down that financial black hole.”

Schrempp is expected to give details of the move today.

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maybe if they quit spending so much money on altezza’s,they could save a buck or two

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i heard about this a while ago

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it’s all cause they stopped making the 3000GT

…fuckers!

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when you sell cars to people that can;t afford them and they get repoed this is what happens I gues those no payments for a year deals wern;t such a good Idea after all :rolleyes:

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Originally posted by OnTheRun710
it’s all cause they stopped making the 3000GT

…fuckers!

yea…and all the vr4’s that sat on the sales lot and rotted because nobody wanted to drop 40k on a mitsu…:rolleyes:

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im still the only one saying sueebeerrrruuuu

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subewho?? :smiley:

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Scooby-Doo:confused:

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Originally posted by OnTheRun710
Scooby-Doo:confused:
ez on scooby doo,thats my daughters favoret!!!:tounge:

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Originally posted by Pewterss
ez on scooby doo,thats my daughters favoret!!!:tounge:

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Someone will swallow up Mitsu…

although if it’s GM, say goodbye to the Evo… everyone saw what they did with the new Saabaru…