NEWS: DaimlerChrysler to Quit Mitsubishi Motors

[theKind]

http://story.news.yahoo.com/news?tmp...bishimotors_dc


DaimlerChrysler to Quit Mitsubishi Motors

STUTTGART/TOKYO (Reuters) - DaimlerChrysler AG said it would pull out of Mitsubishi Motors, leaving the German-U.S. company's bid to become a global car maker in disarray and putting the Japanese firm's future in doubt.

DaimlerChrysler said on Thursday it would not participate in a capital increase plan to rescue Mitsubishi Motors Corp (MMC) because it could not agree on an acceptable deal with other shareholders in the Mitsubishi group.

It also said it would not provide any more financial support to Mitsubishi, Japan's only unprofitable car maker.

"This clearly means separation," a DaimlerChrysler spokesman said, adding that the company will book its 37 percent stake as a discontinued business until it finds a buyer.

The decision came at an extraordinary meeting of DaimlerChrysler's supervisory and management boards on Thursday, just two weeks after Chief Executive Juergen Schrempp defended his global strategy in front of angry shareholders.

Schrempp, who has presided over the loss of some 37 billion euros ($44 billion) in market capitalization since Daimler merged with Chrysler in 1998, will provide details of the strategic U-turn in a teleconference at around 5 a.m. EDT on Friday.

DaimlerChrysler shares were up about 6.5 percent at 38.43 euros after opening 8.9 percent higher on the news.

The news took the three main Mitsubishi group firms -- Mitsubishi Corp, Mitsubishi Heavy Industries and Bank of Tokyo-Mitsubishi -- by surprise but they vowed to continue their support of Mitsubishi Motors, the main flagbearer of the group's 120-year-old three-diamond logo.

"They may be able to scrape together enough aid money to see Mitsubishi Motors through the next year or two, but the auto maker will need more capital from outside," said Tatsuo Yoshida, a Tokyo-based auto analyst at Deutsche Securities.

"It would be very difficult for Mitsubishi Motors to survive on its own."

[911S_TARGA_RSR]

lOl.

[EvoZero]

This is a big deal. Mitsubishi employs a lot of people in Japan, and is a major engine of that country's economy. Same here...the Normal, Ill plant employs several thousand people directly, and the town itself is very dependent on the plant. If Mitsubishi were to stop making cars altogether, it would be a disaster for that region and for Japan's economy.

[feenix z]

OOH you bastards!!!!
This is weak sauce. Mitsu has just recently put one of the world's hottest cars on the streets of the united states. It's begining to change the world of sports cars by offering a four door sedan that can grip, stop, and do the dance through the cones with Italy's premier supercars, not to mention dust off some serious European and American Iron in acceleration for pennies. Now these corporate fat cats want to cut off their funding! I say let Mitsu ride a little longer, they will catch on again. Chrysler owes them that much for letting them take real-deal sports cars (eclipse and 3000gt) and put that damn chrylser star with two too many points on them.

DAMN THE MAN!!!!! FIGHT THE POWER!!!!!!! FUND MITSUBISHI!!!!!!!!!!!

[feenix z]

anyone heard anything new about Mitsu?

[97Tsi]

feenix z is right, DSM will be back on the board again, they just need some time. They're gonna make another big mistake, just like when they stopped the production of the turboed eclipse....sigh!

[feenix z]

I think the evo, including the new evo mr more than make up for the loss of the turbo elcipse. I think the real mistake of Mitsu was changing the styling to the current version. It looks like a pontiac concept gone horribly wrong.

[97Tsi]

that's true, the evo makes up for the loss of the turbo eclipse, but imagine if they still offered the turbo eclipse along w/ the evo. They'd be even better off, IMO.

As for the concept, you couldn't be more correct!

[Sleepr awd]

i think they discontinued the turbo eclipse BECAUSE of the EVO, you've got the same engine in both cars, buy a turbo eclipse for 2/3 the price of a new EVO and spend the other 1/3 (10k$) making it even FASTER than the evo, they just tried cutting the market for the turbo 4g63 to make us more hungry for the evo

[Master Tech Dude]

I hope they don't go under!
That would be a huge blow to my income as a technician here in the US. Mitsubitshis are always needing something done to them.

Mitsu tech since 1990
Master Tech Dude

[GadflyII]

They discontinued the Turbo eclipse because they were loosing money on the cars every year they sold them. Sure they made a profit at the point of sale, but the warrenty claims cost 3x more to fill than they made on sale of the car. The Chrysler brand cars were discontinued earlier than planned as soon as they had taken delivary of the bare minimum # of DSM cars as required by contract.

The first to go was the Laser, This car was discontinued years ahead of schedule out of fears that the Lazer would further lower the already suffering reliability record of one of Chrysler's flagship brands. They left the 4g63 powered cars on the Eagle brand, which by 1993, was already set on a 5 year plan to kill the brand. They sold the Talon until 1997, at that which time they had furfilled thier contract obligation to DSM. and stopped placing orders.

Mistu got stuck with the eclipse platform. Mistu continued to loose money on the car until 2002 from expensive engine replacments due to the infamous crank walk and other such warrenty claims. Some reprieve was found in the new eclipse (Who' development started in 1996, for release as a 1999 model was delayed for a year to clear out the last of the DSM platform eclipses.) Dispite new model releases and increased sales, Mitsu. Motors still took a loss in 2000, 2001, 2002, and 2003. In a 2001 stock holders meeting, princible cause of this loss was stated to be excessive warrenty claims, the freqency of expensive failures, and car buy backs (Lemon law). Mistu. began to plan out it's future after that meeting. It planned to intoduce products in the hot, youth positioned SUV market, youth econo boxes (Lancer), and mid range sports coupes (Eclispe). It was in 2001 that the move to expand Mitsu's most popular product, the Evo, to the US to help the strugling brand was put forth. The move was primarly made to stop Mistu's closest competitor (Subaru) from sucking up too much of it's market share. The WRX was a huge success and far exceed the predictions of both Subaru, and Mistu. Seeing this, Mitsu made final commitment to sell the evo in the states.

With the demise of the DSM cars, a sizable chunk of market share remained open. Several companies were quick on the take to try to fill it. Honda planned the return of the Civic SI, Subaru planned to bring the WRX to US shores, (and released the 2.5 RS almost immediately.) Ford had the SVT group working on the SVT focus, and Ford Europe was working on the Focus RS (which sadly never made it to the US due to market sateration). Mistu screwed up. They had a popular line of cars, but deviated too far away from it, and lost market share.

So what was Mistu's biggest mistake?

First the DSM cars were a money pit. They should of killed them with the end of the 1st Gen cars.

Second, they should of introduced a comtetive product BEFORE they killed the popular DSM eclipse.

Third, They were too slow in bringing the EVO to the states. Allowing Subaru to establish a firm grip on thier marketshare.

If they would have introduced the new eclipse sooner, and the EVO at the same time, they wouldn't of lost marketshare, and most likely could of kept the conseritive Subaru out of the market. They did to one thing right, and that is extend thier factory warrenty, but really locked down the dealships as to what claims to honor. (If you mod it, don't expect them to fix it)


Cheers!

Ron

[97Tsi]

I dunno if any of you guys read the 100 Best Sport Compact Cars of All Time (not sure if that's the exact title of article, so don't quote me on that.) in the lastest issue of SCC, but the evo was ranked number one. So Mitsu obviously has it right, I just hope they can keep it going in the right direction.

*crosses fingers*

[Sleepr awd]

#1 baby, my car isn't even on there... all the otehr eclipses are ...but not mine!!