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Taking into consideration the structural nature of the crisis the world economy is going through and, therefore, its lasting impact on all stakeholders in the automotive industry, Mitsubishi Motors Corporation (MMC) has decided to act pro-actively with structural changes in its organisation to better prepare for tomorrow.
A first example was the recent consolidation of its Design & Engineering functions to a central location in Japan, reflecting a fundamental shift in its long-term product strategy from regional cars to global cars.
Along those lines, MMC proposes to implement a new business model for its European subsidiary, Mitsubishi Motors Europe B.V. (MME). This alignment with MMC's global organisation is meant to better develop MMC's presence in its most important global business region through better efficiencies and a direct connection with the European markets and customers.
As a reminder, what is now MME started as a small liaison office in 1977, based in Rotterdam. Since then, it has grown to a 335 strong operation fulfilling all expected manufacturer's functions in the region, on behalf of MMC. Whilst successful (and non-stop profitable between FY2003 and FY2007), MME sales1 were nonetheless down 18% between CY2007 and CY2008 (from 200, 045 units to 164,462 units) with a further decrease expected for CY2009, in line with forecasts for the industry in the region.
Furthermore, in order to better fulfil its long-term mission, MME should accompany Mitsubishi Motors' strategic shift from being an SUV-focused nameplate to being a supplier of environment-friendly passenger cars / crossovers with a SUV presence - itself pre-empting pro-actively structural changes in market demand.
Translated into business model terms, it is clear that the size and scope of the current MME is no longer suited to both the fundamental evolution of the automotive industry and the strategic re-deployment Mitsubishi Motors has decided to embrace in this new context.
As a result:
After having fulfilled all necessary statutory and other legal requirements, among which the procedure concerning the right of participation of the Works Council, and after implementation, this proposal would unfortunately translate into a reduction of 45% of today's white-collar headcount.
It should be noted that these proposed changes would not affect Mitsubishi Motors' European production hub, NedCar.
This proposal is subject to all necessary statutory and other legal requirements. The said proposal would take effect as soon as the aforementioned has been concluded.
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