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Mitsubishi may axe Adelaide plant

Mitsubishi's Australian chief executive, Robert McEniry.

The board of carmaker Mitsubishi Motors will decide today whether to axe its troubled Adelaide plant amid growing signs the operation will close with the loss of up to 1000 jobs.

Mitsubishi's Australian management confirmed last night that the future of the Tonsley Park factory was under review, and would give no guarantee it would continue production.

The plant produces Mitsubishi's flagship six-cylinder 380 sedan series, which has been struggling for market share since a poorly received relaunch two years ago.

Official sales figures to be released today are expected to show fewer than 700 380s were sold in January — one of the worst figures on record and well below early forecasts of up to 2500 a month.

Speculation that the plant was on its last legs intensified yesterday when two financial news services, quoting senior but unnamed company officials, reported from Tokyo that Mitsubishi Motor Corp had taken the decision to shut the car assembly works in Adelaide's south. The Nikkei service operations would cease within weeks.

Federal Industry Minister Kim Carr said last night Mitsubishi had advised there was nothing the state or federal government could do “to add to the company's deliberations”.

South Australian Premier Mike Rann said he had been advised a decision on the plant's future would be taken today by the Mitsubishi board in Japan.

Mr Rann revealed that he had spoken yesterday to Mitsubishi president Osamu Masuko in Tokyo after meeting the company's Australian chief executive, Robert McEniry.

“I've been told by Mitsubishi management that any decision will be solely a commercial decision, based on the viability of local manufacturing, as part of a global restructure of the company,” Mr Rann said.

The closure of the Tonsley Park factory, if it occurs, would be the latest in a long line of setbacks for the Australian car industry as it shed an estimated 7500 jobs over the past four years.

Adelaide has been especially hard hit. Mitsubishi closed its engine plant at Lonsdale with the loss of about 650 jobs in 2005, and at the same time slashed 350 jobs from the Tonsley Park assembly facility.

A further 250 jobs were axed at Tonsley Park in 2006, while Holden cut more than 600 positions at its Elizabeth plant in Adelaide's north.

Mitsubishi Australia spokeswoman Lenore Fletcher said a review of the company's Australian operation had been under way for several months.

“MMC has not confirmed any decision at this point,” she said.

But workers at the plant were braced for bad news when they reported for duty this morning, with one veteran vehicle checker saying it was expected to shut. “The entire plant is pretty clear about what's happening,” he said. “Without a doubt, they're going to announce the closure.”

The Tonsley Park operation employs about 800 workers on its car assembly line, and another 200 in administrative roles.

John Camillo, state secretary of the Australian Manufacturing Workers Union, said he had no news from Mitsubishi.

A spokesman for the company's headquarters in Tokyo said the group was examining the Adelaide operation as part of a three-year plan for restructuring its worldwide operations. “The company has been reviewing the mid- to long-term prospects of the Australian operations,” he told The Australian.

MMC executives have previously acknowledged that the future of the Adelaide operations needed to be settled in order to complete the plan, expected to be released in about three months, with the group's full-year results. December quarter earnings will be announced in Japan today.

A Nikkei report yesterday said the Tonsley Park closure could happen as early as March and would clear the way for the reorganisation of MMC's international manufacturing operations, with a stronger focus on emerging auto markets.

The Bloomberg service also reported the plant's impending closure.

Mitsubishi's sales and export performance has been relatively healthy this year but head office has long been worried by deteriorating sales of the Adelaide plant's mainstay, the 380 series 3.8 litre sedans.

During the last scare over Tonsley Park's survival 15 months ago, then federal industry minister Ian Macfarlane and South Australian Treasurer Kevin Foley sought reassurance in Tokyo and were told by Mr Masuko the Adelaide assembly works' future depended on a considerable improvement in 380 sales.

Sales have continued to fall, however, to about 10,000 units last year. Three years ago, MMC was planning to produce 30,000 sedans a year in Adelaide.

In 2006, car manfacturing employed 27,000 people in Australia, and generated nearly three times that number of jobs indirectly.

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