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Deal With UAW Saves Mitsubishi Plant in Illinois

Outlander Sport-Crossover key to reviving struggling brand.

by on Feb.04, 2011

Mitsubishi launches U.S. production of the Outland Sport crossover in 2012.

Mitsubishi Motors Corp. has announced plans to build a new version of the Outlander Sport-Crossover Utility, starting in mid-2012, at the Mitsubishi Motors North America (MMNA) plant in Normal, Illinois.

The Normal plant has been operating at barely half its capacity for the past several years and was thought to be in danger of closing. Mitsubishi, however, was able to strike a deal with the United Auto Workers Union that will bring new products to the plant.

The official announcement came today during a ceremony that included MMNA President Shinichi Kurihara, Illinois Governor Patrick Quinn, and UAW President Bob King.

The current version of the Outlander Sport went on sale in North America in November 2010.  Outside of the United States, Outlander Sport is also badged as RVR and ASX, and represents Mitsubishi Motors’ latest offering to the globe’s fastest-growing automotive segment, the entry-level crossover.  The vehicle is built upon the same flexible vehicle platform that underpins the Lancer compact car and Outlander SUV, both of which are sold globally.

Mitsubishi Motors North America anticipates adding production of Outlander Sport to the Normal plant by mid-2012, noted Kurihara, replacing the slow-selling models currently assembled there, such as the Eclipse sports coupe.

“With the new model, the plant will have better utilization, and, of course, we will see improved efficiency when we eventually consolidate to one model with higher production volume,” said the Japanese executive.  “I fully expect this plant will strongly improve its performance further down the road.”

Kurihara noted that bringing production of the Outlander Sport, currently built in Japan, to the Normal plant reinforces MMC’s commitment to the U.S. market.

“Mitsubishi Motors remains fully committed to producing vehicles in Normal.  We will build vehicles here not just for the United States, but for many nations around the world,” declared Kurihara, estimating that about half of the Outlanders produced in Illinois will be exported.

That underscores a significant trend for Japanese manufacturers large and small.  With the yen surging to record levels against the dollar, it is becoming increasingly difficult to produce vehicles in Japan, and Mitsubishi is just one of numerous brands, a list also including giant Nissan, shifting production out of the home market. (For more on the hollowing of the Japanese auto industry, Click Here.)

Kurihara also expressed appreciation to the State of Illinois for approximately $29 million in EDGE Grant support over the next ten years. Governor Quinn expressed his pleasure at the ceremony.

“Mitsubishi’s decision to produce a new generation of automobile here in Illinois is a strong testament to the strength of our workforce and the state’s appealing business climate,” said Governor Quinn. “By working to stabilize our economy and investing in companies that are investing in Illinois, we’re helping to keep thousands of jobs in Illinois, helping reinvigorate our automobile industry and continuing our economic recovery.”

MMNA is one of the only Asian or European auto manufacturers currently partnering with the UAW, and the only one to do so in a plant solely operated by a foreign-owned maker.  About 1,000 of MMNA’s 1,300 employees are members of the union.  Toyota recently abandoned a UAW-organized plant, near San Francisco, that it had operated in a partnership with General Motors, the U.S. maker stepping out of the joint venture following its 2009 bankruptcy.  Mazda operates a unionize plant, near Detroit as part of a partnership with Ford.