JRock

Mitsubishi is currently the only Japanese auto maker not turning a profit, and it looks like Daimler-Chrysler hears a sinking ship and wants out.

Maybe if Mitsubishi actually built quality vehicles they'd have a chance. After seeing how many ridiculous issues Evo8 and other Mitsu owners have, it's safe to say MMC is getting what it deserves. They refuse to get their act together and they are paying for it.

Mitsu Motors North America has always struggled with their brand's image and about two years ago attempted to start a new image campaign with plans for new vehicle or refreshes releases every six to twelve months. What they failed to do is improve what really counts - the reliability and quality assurance/control issues that have always plagued them.

gavriil

Wait a minute. I was reading that DCX was thinking of an $8 Bil. infusion into MMC. What changed now?

zamo

http://www.reuters.com/newsArticle.j...toryID=4922705

tmk70

If they made cars that weren't BUTT FUCKING UGLY now, maybe they wouldn't be in such a predicament. Have you seen the new Galant?

zamo

yes i saw it. I do not know what are they thinking!

See how succesful cars Mazda is building.

Scrib

Seems like DC made the right move on this. I heard them talking about it this morning when I was getting ready for work. When I initially heard about this, I thought it was a bad move on DCs part.

Mitsu needs some bailout. I wouldn't be surprised if they get it from someone.

Minch00

The only car I would consider buying from Mitsu right now would be the Evolution. The new Eclipse better be something special, or I think Mitsu is f'ed in the A.

anothercls

It has something to do with their marketing in 2003, trying to sell as many eclipses as possible, losing 450million on defaulted loans or something like that....

zamo

yes they were screwed.

Yet Mitsubishi's performance in the U.S. market was compromised by a ``0-0-0'' finance promotion in 2001 and 2002 - no interest, no money down, no payments for a long time - geared to attract young buyers.

The promotion blew up in Mitsubishi's face when customers defaulted far beyond expectations in 2002 and 2003, leading to millions in loan losses and lower ratings for the automaker's asset-backed securities.

http://quote.bloomberg.com/apps/news...d=aIcnEVhHnY8A

95gt

IBTM

Mitsu sucks

kansaiwalker1

This just in from Yahoo:


DaimlerChrysler Pulls Plug on Mitsubishi


By Alexander Huebner and Chang-Ran Kim

STUTTGART/TOKYO (Reuters) - DaimlerChrysler AG will no longer bankroll Mitsubishi Motors and may sell its stake, leaving the German auto giant's global strategy in disarray and the future of the ailing Japanese firm in doubt.


Chief Financial Officer Manfred Gentz said on Friday that the Stuttgart-based company failed to agree with other Mitsubishi group shareholders on a bailout plan for Mitsubishi Motors Corp and would not provide any new funds.


DaimlerChrysler shares shot higher as investors expressed relief at what appeared to be the end of its costly entanglement with Japan's only unprofitable carmaker. They were up 6.7 percent at 38.5 euros.


Several brokers upgraded the stock.


"It's a great news that they've stopped pumping money into Mitsubishi, they are fighting on so many fronts already and it was never an important focus," said Gerald Roessel, a fund manager at Invesco Asset Management in Frankfurt. "It was high time that they stepped on the emergency brakes."


Gentz said DaimlerChrysler would not decide on the fate of its 37 percent stake until the details of a restructuring plan led by three other Mitsubishi group firms -- who own 23 percent of Mitsubishi Motors -- were clear, but a sale was possible.


"We may reclassify our participation from at equity to available for sale," he said in a conference call held to explain the strategy U-turn agreed by management and supervisory boards late on Thursday.


Anticipation of a bailout had lifted Mitsubishi Motors' shares by 34 percent this month. The shares were suspended for much of the day, and met a wave of selling when the suspension was lifted, closing 25 percent down at 241 yen ($2.21).


DaimlerChrysler bought the Mitsubishi stake for 405 yen per share in 2000, with a view to expanding in Asia. The deal was engineered by Chief Executive Juergen Schrempp, who dreamt of building a global automaker.


Schrempp, who has presided over the loss of some 37 billion euros ($43.97 billion) in market capitalization since Daimler merged with Chrysler in 1998 and faced calls to resign at a shareholder meeting two weeks ago, was not available to comment.


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 auto maker 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.

Shares in Mitsubishi Heavy, Japan's largest heavy machinery manufacturer, trading house Mitsubishi Corp and Mitsubishi Tokyo Financial Group, which own a combined 23 percent of the auto maker, all sank.

charliemike

Jeezus ... About time DC let Mitsu go ... If MMC is run that poorly, no amount of capital will fix it.

titan

Great news. Mitsubishi was bleeding DCS for a good minute now. They should foucus on Benz quality improvements and the North American Brands (Chrysler, Dodge, and expecially Jeep).

titan

bout time.

chef chris

The 0-0-0 still has ill effects, even on those who did not default.

Any person trying to trade a Mitsu that did that 0 thing is getting turned away for financing without BOOKOO bucks. Not only do Mitsu's values fall like rocks, with no payments being made, the principal just sat there.

$24K for a new Eclipse in 2001...no payments made all year...pay one year...try to trade...owe $21K on a $16K Eclipse. Bad move Mitsu.

SilviaGTO

they fucked up when they discontinued my car (3000gt), and changed the design of the eclipse.

1SICKLEX

Mitsu is in trouble, trouble. Their sedans and SUVs are avg, nothing class leading except the EVO.

When I saw the 3rd gen Eclispe, I knew they lost it. Totally alienated their crowd for a mature coupe that no one wants.

They make some of the ugliest cars on the planet, sad.

SilverCL225hp

They should do something Nissan has done. Make some nice cars, by nice not only mechanically speaking, also the styling. Besides Lancer, I can't find one Mitsubishi I could stand seeing.

goldmemberer

Make a gorgeous car and even if it has par or slightly sub-par mechanics, people will buy it. Cosmetics is key, for serious.

SilviaGTO

you mean the lancer evo right? cause the lancer is fugly.

gavriil

Without DCX, Mitsu will sell for scrap to some other manufacturere. It's just a matter of time I think.

GunMetaL CLSPiG

well mitsu sucks....... well other then the Evo......... yes only evo

JRock

Mtisubishi's CEO just quit:
http://wbal.com/stories/templates/ne...rticleid=18131

JRock

http://www.acura-cl.com/forums/showt...58#post1774658

http://www.reuters.com/newsArticle.j...toryID=4940219

titan

Damn... I guess he couldn't take the heat.

gavriil

Chrysler feels partner's pain; product plans tied to troubled Mitsubishi - - By MARY CONNELLEY AND LINDSAY CHAPPELL -Automotive News - - Source: Autoweek

DaimlerChrysler AG's decision to stop pumping money into Mitsubishi Motors Corp. means the Chrysler group's crucial product resurgence is tied to a company with a shaky future.

The Chrysler group and Mitsubishi are working closely on several projects, including small-car platforms and a new engine plant.

The partners also plan to more closely integrate manufacturing. The Chrysler group may have to rethink some of its strategies. It will likely be spared major headaches in the short term. But the longer-term implications are unknown. For example, how the companies would handle a need for cash infusion is unclear.

DaimlerChrysler, which owns 37.3 percent of Mitsubishi, had been helping its troubled Japanese affiliate develop a business plan. But in a surprise announcement last week DaimlerChrysler said it would not sink any more money into the company. That created uncertainty about ties between Mitsubishi and the Chrysler group in the United States.

Just working together could get more complicated for the Chrysler group and Mitsubishi.

"One of the big questions is how you can get along in the working relationship," says an industry consultant with ties to DaimlerChrysler. "It is hard enough to do things with a partner when you are still talking."

Next year, the Chrysler group will begin selling the first of a wave of vehicles developed with Mitsubishi. The clock will keep ticking to product launch regardless what happens in the stormy relationship between Mitsubishi and DaimlerChrysler, industry analysts say.

The Chrysler group's U.S. product plans will rely heavily on Mitsubishi for at least four years.

The two companies are jointly developing a front-wheel-drive platform for a wide range of small- and mid-sized vehicles, including replacements for the Dodge Neon and Stratus, and Chrysler Sebring and PT Cruiser.

The vehicle platform development is advanced, protecting the Chrysler group's product portfolio, analysts say.

"The basic engineering of the platform is in the can," says one industry analyst who declined to be identified. "At this point, it is about validating the design, crash testing and validating the production process. The platform design and engineering is complete."

The Neon replacement will be the first fruit of the combined platform, Tom LaSorda, the Chrysler group's incoming COO, said this month. The car will debut in calendar 2005.

As part of the strategy, the two companies planned to more closely integrate manufacturing, shifting production among assembly plants building vehicles based on the new platform.

"The vision is that if you ever wanted to build a product in each other's plants, you want to be ready for it," LaSorda said. "There has been no decision for us to build a product for them or for them to build a product for us. But if you were to ask if it is possible from a flexibility or engineering (standpoint), the answer would be yes."

The Chrysler group vehicles are being developed under a commercial agreement with Mitsubishi, says Jason Vines, Chrysler group spokesman.

"Some of the vehicles are less than a year away. The thing is getting very close to automatic pilot," Vines says. "The question is what will Mitsubishi be like two or three years from now, and I don't have that answer."

Mitsubishi's weakness may lead to stronger ties between the Chrysler group and Hyundai, says Michael Flynn, director of the Office for the Study of Automotive Transportation in Ann Arbor, Mich. "Hyundai is looking like Mitsubishi did 13 or 14 years ago, getting stronger and expanding U.S. market share."

DaimlerChrysler owns 10 percent of Hyundai Motor Co.

Also unclear is what effect Stuttgart's decision will have on Mitsubishi's North American sales and manufacturing. If DaimlerChrysler cuts funding to Mitsubishi, the Japanese automaker will have to decide whether to develop products for the United States and whether to build them here, says Alan Baum, a partner in The Planning Edge, a Farmington Hills, Mich., forecasting firm.

"I could very easily imagine DaimlerChrysler taking over Mitsubishi's U.S. plant," Baum said, referring to Mitsubishi's plant in Normal, Ill. Normal is one year from producing a new generation of the Eclipse coupe. That car is the third leg of Mitsubishi's Project America program to create a common platform for the Eclipse, Galant sedan and Endeavor SUV.

Plant President Rich Gilligan last week assured employees that DaimlerChrysler's decision does not change the plant's status.

DaimlerChrysler spokesman Han Tjan says the withdrawal will not change the plan to build a shared Mitsubishi, Chrysler group and Hyundai global engine in Dundee, Mich.

kansaiwalker1

From the autoextremist:

Chrysler. The biggest disconnect in the auto business going on right now? How Chrysler sees itself and where it wants to take the brand - as opposed to the reality of the situation for the nameplate in the marketplace. Chrysler believes it can reposition itself as a premium brand aimed at young, affluent buyers. Wow. We hope they didn't expend too much energy coming up with that one. This just in from the "Masters of the Obvious" File, Chrysler - join the club. Every automaker doing business in the North American market desires the exact same thing - attracting young, affluent buyers. What makes Chrysler different? Or maybe the better question that Chrysler marketing needs to ask themselves is, Why Chrysler? Because in spite of some excellent products in the pipeline - specifically, the new 300C - Chrysler seems incapable of seeing themselves in the mirror as they really are. The biggest obstacles to their goals? The lingering "K-car/Minivan" brand image that they can't seem to shake out there in the real world and a dealer body ill-equipped to sell premium vehicles. Yes, of course there are exceptions. There are some Chrysler dealers out there who truly "get it" and understand what's needed to sell premium vehicles, but they are decidedly in the minority. A perfect microcosm for Chrysler's disconnect out in the marketplace? Let's take a look at the Crossfire. A sensational car by all accounts and one of the truly arresting designs currently available in the U.S. market - the Crossfire is for all intents and purposes dead in the water. Chrysler finally propped-up the car with a brace of incentives early in the first quarter, but the bottom line for the Crossfire (other than the fact that it's underpowered) is that the dealers don't have a clue as to what to do with it. And even worse, enthusiast consumers lured in by the look and the package details of the Crossfire are immediately turned off the moment they set foot in a typical Chrysler showroom. It's just too much of a disconnect. Chrysler's response? Introducing a roadster version, and a much-needed power boost with an optional AMG-massaged performance engine package. But there's also a correspondingly hefty price increase to go along with it - pushing the Crossfire well over $45,000 - and that just exacerbates the problem. If Chrysler wants to see what it's like going after young, affluent buyers in the market they need to look no further than their real-world experience with the Crossfire. The bottom line? They're not getting it done - and they can't get there from here. Chrysler boasts of the new product launches they have coming besides the 300, like the PT Cruiser convertible and the new Town and Country minivan. But the fact of the matter is that Chrysler can't even remotely support all of those nameplates properly. They just don't have enough juice. Chrysler needs to pick and choose their spots carefully and play up their strengths. And the only game in town for them this year is the 300C. It's distinctly American in its presence and tone. It "fits" with the brand's heritage. And it offers something (at least for now) that no one else is offering. If Chrysler marketing can keep their collective head down and focus on what they have, and not get lost in some blue-sky version of where they think they should be - they might have a shot. But something tells us that it's just too much to ask, given the players involved.


Manfred Gentz, DaimlerChrysler CFO. He argued forcefully for DaimlerChrysler to not put anymore investment money into Mitsubishi - and then DaimlerChrysler stock immediately went up more than six percent when the news hit the street. Scheduled to retire at the end of the year, the Gentz name is now popping up as a possible successor to Hilmar Kopper, the chairman of DaimlerChrysler's all-powerful supervisory board - which immediately tags him as a rival to Juergen Schrempp, who until now was the automatic choice for the position. Judging by the level of chaos that Schrempp has presided over during his tenure, Gentz may be a much stronger candidate than anyone had even imagined.

Juergen Schrempp. His continued excuses, combined with the steady stream of "It won't be long now" and "We've turned the corner" speeches - not to mention the takeover-masquerading-as-merger fiasco - have had a devastatingly negative effect on the DaimlerChrysler image. Add to this the fact that Mercedes-Benz, heretofore one of the world's unimpeachable brands, continues its death-spiral into the abyss of poor quality Hell, which will require years to recover from - if ever - and you're left with one of the worst performances by an automotive CEO ever recorded. Let's get it "On The Table," shall we? If Juergen Schrempp had been the head of a U.S. auto company, he would have been toast two years ago. As it is now, it would take a miracle turnaround of epic proportions for DaimlerChrysler over the next three years in order for Schrempp's legacy to be anything but one of abject failure. And from where we sit, that's just notgonnahappen.com.

Mitsubishi. Can you say "freefall"? Mitsubishi will have to rely on "Japan Inc." to bail it out - even if it does continue developing joint projects with DaimlerChrysler that were already in the works. But the bailout may come too late - because the chances of Mitsubishi going down for the count are clearly much greater than its chances for survival.

Hyundai. The Korean automaker is talking of ending its alliance with DaimlerChrysler, in light of recent developments. DaimlerChrysler currently owns 10.46 percent of Hyundai. Memo to Hyundai: You don't need DaimlerChrysler in order to survive and succeed. Terminate the deal immediately and walk away.