BLOOMINGTON - During Mitsubishi Motors North America's unprecedented 12-week shutdown, a lot happened in the auto industry. Chrysler filed for bankruptcy, while General Motors teetered at the brink. Toyota was awash in red ink amid word that dealers might soon disappear. The Pontiac brand was relegated to the history books, and bailout became the buzzword.
As more than 1,000 MMNA workers resumed producing the Galant, Eclipse, Spyder and Endeavor earlier this month, Chief Operating Officer Jerry Berwanger said the Normal plant is weathering the storm, but he couldn't predict when the clouds would pass.
"I'm not going to say we're any better off than the rest of the industry, but we're not any worse off," he said. "It was important we came back to work … We have to get the wheels turning."
Berwanger said the plant is working somewhere between half and full production of about 950 vehicles a week, but would not be more specific. He also wouldn't discuss line speed, another production indicator.
And, he had no guess about when workers might resume making cars full time.
"We have to build to demand," said company spokesman Dan Irvin.
David Cole, chairman of the Michigan-based Center for Automotive Research, said that strategy is being used throughout the industry right now. So far, this year's U.S. auto sales are on pace to total about 9.5 million or 10 million vehicles, said Cole - a drop of 25 percent or more from the 13.2 million sold last year.
"The industry in general is really committed to getting inventory under control and not getting back into production until things get to manageable levels," he said.
Mitsubishi's 2008 North American sales of 97,257 were the worst in at least a decade. The latest monthly tally for April shows fewer than 4,000 vehicles purchased - a number not seen in years. Year-to-date sales for the first four months of the year - 17,753 vehicles - are 40 percent less than April sales of the Honda Accord.
Buyouts - the third round in the past nine months - were completed for an unspecified numbers of United Auto Workers members, dropping the total number of people assembling cars at the plant to 1,065.
"It hit home. It's real. It's not happening to GM or Ford or Chrysler. It's here," said Berwanger. But he reiterated there are no plans to close the facility, now entering its third decade of operation. The company wants to sell cars in North America, so it will build cars in North America, he stressed.
Short-term, Berwanger doesn't see the need for any more buyouts, saying the company will make staff adjustments through attrition as the need arises. It has been nearly five years since the plant's second shift was laid off amid larger problems faced by its parent company, Japan-based Mitsubishi Motors Corp. Not surprisingly, it's also unlikely any of those employees will be working at MMNA anytime soon.
"The way things are right now, I don't foresee it in the near future. It would take a new model," Berwanger said.
Whether that new model might include Saturn is unknown.
News reports out of Detroit on Friday that Mitsubishi Motors Corp. might supply vehicles to Saturn dealers if the brand and dealer network is sold, as expected, by General Motors was described as "just speculation" by a MMNA spokesman.
For now, MMNA is producing cars for "any port in the storm," including fleet sales - an area the company scaled back on several years ago because it can affect a vehicle's resale value. It is exporting cars to 32 countries, and has made notable strides in improving fuel efficiency of the 2010 Galant.
The company also is working to trim costs anyway it can. Bound by a no-layoff clause in its current UAW contract, MMNA is trying to save in other areas, including parts, transportation and utilities - the latter can cost $1 million a month.
Cole hopes the industry will begin seeing signs of a stronger turnaround by fall, as consumer confidence increases, the housing market continues to stabilize and incentives - including a possible "cash for clunkers" initiative that would provide tax credits to trade in older vehicles for more fuel-efficient models - take hold.
Locally, he predicts Mitsubishi - with only about .7 percent of the U.S. market - will need an automotive partner to secure its future.
"They just don't have scale," Cole said. "They're going to have to have scale."
What Berwanger hopes for are small signs of optimism, maybe two or three months an upswing in sales.
"In the industry, volume is king," he said. "If you've got volume, you're making money."
Posted in News on Saturday, May 23, 2009 12:00 am Updated: 11:45 am.
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