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Mitsubishi's Magna charter

Howard's way: Prime Minster John Howard met with Mitsubishi officials in Tokyo last week.

A cloud still hangs over Mitsubishi operations in Australia

7 Aug 2001

MITSUBISHI Motors Corporation's announcement that it has approved production of a substantially upgraded and redesigned Magna/ Verada range in Adelaide from 2003 has dulled but not ended speculation about the long-term future of its Australian operations.

The announcement means production is guaranteed at the company's two Adelaide plants until at least 2005 when an all-new replacement is expected.

Whether that new generation car will be built in Australia is yet to be decided.

The facelift, which will cost $70 million, was announced by MMC chief operating officer Rolf Eckrodt in a statement issued after a 30-minute meeting with Australian Prime Minister John Howard in Tokyo on Friday.

It came as media coverage intensified last week over the future of the two Adelaide plants in the wake of unsourced Japanese news agency reports saying they were to be closed, and industrial action that virtually shut down the Australian car industry.

That there is no commitment beyond 2005 has been taken as a signal MMC will not continue to invest in a loss-making operation. Mitsubishi Motors Australia lost $186.4 million in 2000 but is expected to turn that around in 2001.

The revised car will be the first design under MMC's new global image program, headed by MMC's new chief designer Olivier Boulay.

"The redesigned Magna and Verada products will be sensational. The Australian public is going to love them," Mr Eckrodt said in his statement.

This is the latest in a series of statements and announcements from Mitsubishi in Australia and Japan about the future of the Adelaide plants. In April, Mitsubishi Australia issued a sketch of its proposed facelift for 2003, but it is unknown whether this now has any relevance.

Mitsubishi Australia spokesman Charles Iles said the decision had been received with relief and pleasure in Adelaide.

He said Mitsubishi Motors Australia managing director Tom Phillips, also in Japan on Friday, was "very happy" about the news.

Mr Iles said the next fight for MMAL was to get the go-ahead to build an all-new car due in 2005: "That's another exercise," Mr Iles said. "There's a lot of work going into that at the moment.

"At the moment we are looking at new models but for competitive reasons we are not going to talk about what we are doing further down the track." The MMC statement said Mr Eckrodt had presented details of the decision and upgraded range to Mr Howard during their Tokyo meeting.

"Mr Eckrodt emphasised that the decision to proceed with this program was based on MMC's analysis of the Australian business opportunity and its confidence in its Australian subsidiary," the statement said.

"Mr Eckrodt said he was pleased to have been given the opportunity to advise the Prime Minister about the model upgrade and redesign, and he hoped that now the Australian public could be assured of MMC's commitment in Australia." The upgraded Magna/Verada range is not expected before mid-2003.

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