The factory, located in Normal, Il., makes the Outlander Sport.
Mitsubishi Motors corp. plans to cease vehicle production in it’s only North American factory located in Normal, Il. in response to declining demand and an expiring contract with union workers.
The not-so-normal decision comes from Japan’s Nikkei news service. According to the service, the decision is part of a strategic shift to cater more to the booming Asian automotive market. Currently, Mitsubishi is Japan’s smallest auto manufacturer, building 1.26 million vehicles worldwide last year in comparison Toyota, which built 10.23 million vehicles during the same time. A Mitsubishi Motors Corp. North America spokesperson had “no comment” regarding the situation.
In it’s peak in the early 2000’s, the Normal, Il. factory made 200,000 vehicles per year compared to last year’s 69,176, according to Mitsubishi. In recent years the factory has been producing the Mitsubishi Outlander Sport, the manufacturer’s small SUV which shares the Outlander name with a completely different, much larger SUV.
The plant’s 918 workers are represented by the United Auto Workers Union. Kyle Young, vice president of UAW Local 2488, which represents the plant’s workers, said the union’s contract expires in August.
“We haven’t heard anything,” he said in a phone interview. “We’re supposed to have negotiations coming up” on a new contract. In the meantime, “it’s business as usual here – we’re pumping out cars.”
Mitsubishi hopes to sell the plant and maintain the factory worker’s jobs. According to the Mitsibushi Motors website, Mitsubishi says that it contributes $120 million a year to the local economy in taxes, salaries and benefits.
There is money to be made in the booming Asian market. The International Monetary Fund says the Asian economy could grow 5.5 percent per year as the population continues to grow and prosper. With more urbanization, Asian country citizens are making higher incomes which means more disposable incomes to spend on luxuries like vehicles. This means even lucrative auctions seen in Singapore, which raffle off license plates to potential vehicle owners for prices as high as $5,000 each because they are limited.
The numbers do not lie. In a report, Japanese vehicle-maker Honda states that they expect 90 percent of sales growth this year will come from the Asian market.
The Mitsubishi factory in Normal, Il. has been open since 1988 when it was opened as a joint-venture with then-partner Chrysler. Hopes remain high that negotiations with the auto union will allow workers to maintain employment.