Mitsubishi, UAW agreement sets stage for new product at Ill. plant

Mitsubishi, UAW agreement sets stage for new product at Ill. plant

Automotive NewsDecember 17, 2010 – 2:09 pm ET 



Mitsubishi Motors North America and the UAW have reached agreement on a new labor pact that sets the stage for the automaker to allocate a new vehicle platform to be built at its assembly plant in Normal, Ill.

A joint-statement issued late Thursday by the UAW and Mitsubishi said the pact "will provide job security for UAW members and that continues the long-standing partnership between MMNA and the UAW into the future."

No other details were provided.

Mitsubishi spokesman Dan Irvin and Ralph Timman, president of UAW Local 2488, both declined to comment.

They cited a confidentiality agreement that prevents both sides from speaking until an announcement is made detailing Mitsubishi’s future plans for the plant.

But the new labor agreement suggests Mitsubishi plans to build something new at the Illinois plant, where it currently assembles the Galant, Endeavor, Eclipse and Eclipse Spyder.

Those vehicles are underpinned by Mitsubishi’s aging PS platform — a strategy in conflict with the company’s goal to produce smaller, fuel-efficient cars that can be sold globally.

The roughly 1,100 UAW-represented workers at the plant voted 77 percent in favor of the agreement, according to UAW Local 2488’s website.

"MMNA and the UAW regard this as an important step for the future of the plant and take this result positively," the statement said. "MMNA appreciates the sacrifices UAW members have made for the long term viability of the plant and we look forward to an exciting future."

Mitsubishi failed to meet a contractual deadline in August when it did not allocate a new product to be built at the plant. Base wages of UAW employees at the plant were increased as a result.


Business planning

The future of the Illinois plant is a key part of the automaker’s mid-term global business plan. The plan, which is nearing completion, is expected to contain a detailed forecast of its operations in the United States, including what the automaker plans to do with the Illinois plant and the makeup of Mitsubishi’s U.S. vehicle lineup.

Mitsubishi’s sales have lagged in the United States in recent years. Sales topped 100,000 vehicles as recently as 2007, but have fallen to just 50,809 through the first 11 months of 2010. Mitsubishi set its all-time U.S. sales record in 2002 by selling 345,111 units.

Industry-watchers have wondered if Mitsubishi would be the next Japanese automaker to exit the United States, but Mitsubishi has consistently rebuffed such speculation.

"People have been asking me for the past six years whether Mitsubishi’s going to withdraw from the market," Osamu Masuko, CEO of Mitsubishi Motors Corp., told Automotive News in September. "But it never enters my mind."

Masuko also hinted at new products for the United States, saying "from what we know at the moment, it is not possible to continue with the models that we have had."

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