Mitsubishi Motors Corporation (MMC) announced the end of Mitsubishi plant facility in the US on July 27 this year. Since then the company has been struggling to find a buyer.
MMC started production in the US in 1988 as a joint venture with Chrysler. In 1991, the plant became the first wholly Japanese owned production facility in the US with unionized workers. Production went well in the first decade reaching a peak of 222,000 units in 2000. Since then a steady decline brought the production levels down to 40,000, which led to the company’s decision to consolidate production in their Okazaki plant in Japan.
The limitation faced by MMC in selling the plant is its contract with UAW (United Auto Workers) which is currently being renewed – a fact that scares off the potential buyers as they will have to uphold the terms of the contract. According to a recent article in the Wall Street Journal, the plant currently employs 950 workers who are at risk of being unemployed when MMC closes the factory by the end of November this year.
UAW is helping the Japanese giant find a potential buyer. Detroit’s big 3 (GM, Ford and Chrysler) were on top of the preference list because of close ties with UAW, but Ford has declined while GM is not commenting on the matter. Chrysler has shown an interest to buy the Mitsubishi plant, but is a long way off from a sealed deal.