Bye Bye Mitsubishi

**FLiPMaRC** · April 23rd, 2004 10:43 PM

DaimlerChrysler to quit Mitsubishi
Reuters / April 22, 2004

STUTTGART, Germany -- DaimlerChrysler AG said on Thursday it was pulling out of Mitsubishi Motors, leaving its bid to become a global carmaker in disarray and throwing the future of the ailing Japanese firm into doubt.

The group said that it had decided not to participate in a rescue capital increase planned by Mitsubishi Motors Corp. because it could not agree on an acceptable deal with other shareholders in the loss-making company.

It also said it would not provide any further financial support to Mitsubishi, Japan's only unprofitable carmaker.

"This clearly means separation," a DaimlerChrysler spokesman said, adding that the 37 percent stake would be booked as discontinued business until a buyer could be found.

Mitsubishi representatives could not immediately be reached for comment.

The decision came after an extraordinary meeting of the DaimlerChrysler supervisory and management boards on Thursday.

Supervisory board sources said earlier that the company had discussed selling its 10 percent stake in South Korea's largest carmaker Hyundai Motor Co. Ltd., worth about 850 million euros ($1 billion), to help fund the Mitsubishi rescue.

Mitsubishi, Japan's fourth largest and only unprofitable carmaker, had been planning to present details of a 700 billion yen ($6.39 billion) bailout to shareholders on April 30.

Reeling from losses generated by a disastrous strategy of offering cheap car loans in the U.S., Mitsubishi is expecting a net loss of 72 billion yen for the 12 months to March 31. It had a profit of 37.36 billion yen the previous year.

Mitsubishi Motors' net automotive debt stood at around 726 billion yen six months ago, while total interest-bearing debt was 1.141 trillion.

"This could be the end for Mitsubishi if nobody else injects fresh capital," said one industry source.

DaimlerChrysler bought the stake in Mitsubishi over three years ago with a view to expanding its presence in Asia. It has since worked to establish closer production ties between the Japanese firm and its other problem child, U.S. automaker Chrysler, to cut

**explorer** · April 24th, 2004 11:47 AM

toyota and honda can easily buy mitsubishi, but that would weaken their company having an overlaping list of products with mitsubishi. renault is the most possible buyer but it has almost all the products that misubishi is selling under its umbrella now. is GM interested to take another fat that will just clog it's already choking system? how about ford, after recovering financially from the firestone recall, is it on the buying spree again? let's see what kind of re-alignment will happen in the next few days or weeks....

**snyc3** · April 24th, 2004 11:56 AM

tsk... tsk... sayang, ang ganda pa naman ng commercials nila... hehehe...

**mazdamazda** · April 24th, 2004 05:29 PM

uh-oh... time not to buy mitsus?

**MAXBUWAYA** · April 25th, 2004 12:40 AM

does this mean i wont have parts for my ballpen?

**odell** · April 25th, 2004 02:57 AM

sayang naman...

**Monseratto** · April 25th, 2004 11:10 AM

Originally posted by explorer
toyota and honda can easily buy mitsubishi, but that would weaken their company having an overlaping list of products with mitsubishi. renault is the most possible buyer but it has almost all the products that misubishi is selling under its umbrella now. is GM interested to take another fat that will just clog it's already choking system? how about ford, after recovering financially from the firestone recall, is it on the buying spree again? let's see what kind of re-alignment will happen in the next few days or weeks....

Renault already controls Nissan Motors while Ford has a stake with Mazda. GM has Isuzu also. Daimler Chrysler was the only one with a small share in Mitsubishi, but apparently the Japanese don't want to relinquish management control to Daimler. The bad publicity of the late recalls has affected Mitsubishi bottomline.