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Mitsubishi to stop producing cars in Europe

Ceased: Mitsubishi's NedCar factory currently directly employs around 1500 workers in Netherlands' town of Born.

Car factory could be sold for €1 as Mitsubishi calls time on Dutch facility

Mitsubishi logo8 Feb 2012

MITSUBISHI is set to cease production at its only European vehicle factory by the end of this year, striking a further blow to the economically-troubled region and casting uncertainty over the future of 1500 workers at its NedCar facility in the Netherlands.

However Mitsubishi Motors president Osamu Masuko is widely reportedly to have said the company is willing to sell the factory for one Euro ($A1.23) to a buyer who can commit to keeping the plant’s employees in work.

“If the payroll of about 1,500 factory workers can be maintained, we may as well sell the assets for one euro,” Mr Masuko is reported to have said on Monday – a gesture never offered to the 1000 Australian workers who lost their jobs when Mitsubishi decided to cease production at its Adelaide facility in 2008.

Located in Born in the country’s south, NedCar is the only major car manufacturer in the Netherlands, directly and indirectly supporting thousands of jobs in the region, including neighbouring Belgium and Germany.

According to official figures, the plant currently produces 40,000 vehicles for European consumption annually – including Colt light cars and Outlander SUVs – a fraction of its capacity compared with a record output of 262,196 Mitsubishi and Volvo vehicles in 1999.

 center imageBelow: Mitsubishi Outlander and Colt models.

The company claims 85 per cent of parts for the Colt and 20 per cent for the Outlander, the latter constructed from knock-down kits, are sourced locally.

Local trade unions say unemployment in the Born area is already high and closing the NedCar plant will be a “disaster” as affected workers will find it hard to get jobs elsewhere.

Mitsubishi says it will not allocate production of a new vehicle to NedCar once the Colt and Outlander are discontinued at the end of this year because “it could not come up with a reasonable solution to utilise NedCar among (Mitsubishi’s) global production operation structure”.

The company expects sales in western European markets to remain static or decline amid financial uncertainty in the Euro zone.

The company will continue to source cars for Europe from Thailand and Japan and recently began construction of a new production facility near Jakarta, Indonesia.

For workers, hope exists in Mr Masuko’s statement, backed up by NedCar’s untapped production volume potential, which could result in another brand – such as fast-growing Volkswagen – using the opportunity to increase its European production capacity.

Since 1965 what is now known as NedCar has been used to construct at least three brands of vehicle – including sedans, wagons, hatchbacks, people-movers, coupes and SUVs.

Originally commissioned to maintain employment in an area affected by a dwindling mining industry, the Born factory built DAF sedans for a decade before being taken over by Volvo, which built cars there from the 1970s to the 1990s.

In 1991 Volvo, Mitsubishi and the Dutch government entered a joint-venture resulting in a high-tech transformation of the Born facility so that it could build the Volvo S40, V40 and Mitsubishi Carisma sedan side-by-side.

Further product lines were later added, including the Mitsubishi Space Star people-mover, plus twins-under-the-skin Mitsubishi Colt and Smart Forfour light cars.

The Outlander-based, badge-engineered Citroen C-Crosser and Peugeot 4007 SUVs have also been produced at NedCar.

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