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Mitsubishi Production Cutbacks in Europe Could Signal U.S. Problems

Mitsubishi’s woes in Europe could be a harbinger of problems in the United States market as well with news that its Netherlands plant will scale back production and the UAW in the U.S. has approved wage cuts.

According to a Reuters report, Mitsubishi will stop production of its Colt subcompact in the Netherlands at the end of 2012. According to Reuters, “The plant has been severely underused since Mitsubishi Motors' former top shareholder Daimler AG pulled Smart production out of the factory that they previously operated jointly.” (Smart is another car in the U.S. that is not selling well at all.)

The same report also says Mitsubishi Motors also has a factory in Illinois that is working at a fraction of its capacity. According to Bloomberg News, United Auto Workers members at Mitsubishi Motors North America's plant in Normal ratified a new contract that includes wage cuts the union has said could determine the fate of the facility and its 1,300 jobs.

Mitsubishi makes three models of car at the plant — Galants, Eclipses and Spyders — as well as the Endeavor SUV. Mitsubishi does not release specific sales numbers but Galant sales were up almost 4 percent compared to last November, and are up 6.6 percent year-to-date. Endeavor is a definite bright spot for the company with sales nearly quadrupled compared to last year (up 329 percent Nov. 09 to Nov. 10) and are up more than 34 percent for the year. Mitsubishi sales have increased 2.4 percent year-to-date.