Mitsubishi Motors to slip into red, cut jobs: report

Agence France-Presse

Posted at Feb 03 2009 12:20 PM | Updated as of Feb 03 2009 09:15 PM

TOKYO - Japan's Mitsubishi Motors plans to cut 300 US jobs as it braces to slip into the red in the current financial year due to weak sales and a strong yen, a report said Tuesday.

Mitsubishi is likely to log a group net loss of around 20 billion yen ($223 million) for the year ending March 31, against a year-earlier profit of 34.7 billion yen, the Nikkei economic daily said.

Japan's fourth largest carmaker plans to reduce its 1,600 full-time employees at a plant in the US state of Illinois to 1,300 by the end of March through voluntary retirements, the paper said without naming its sources.

The firm is also considering cutting the production capacity of a Russian plant it is building with France's PSA Peugeot-Citroen from the previous target of 160,000 vehicles a year, the paper said.

The net loss would be Mitsubishi Motors' first in three years. The Nikkei said it could swell further depending on sales in the January-March quarter, with demand weakening in Japan, North America and Russia.

Mitsubishi Motors did not confirm the report. It is to announce October-December results on Wednesday.

The company said in November it was cutting 1,100 jobs by laying off one third of its temporary domestic workforce.