Aug 01, 2020 (Japan Times) - Mitsubishi Motors Corp.’s announcement on Monday of the closure of a factory that manufactures its Pajero SUV came as a shock to the town of Sakahogi, Gifu Prefecture, where the plant is located.
There is growing concern over the impact of the closure of the factory — which hires around 1,200 workers, making it the largest local employer — on the town’s economy, employment and finances.
Mitsubishi Motors said Monday it is expecting a group net loss of ¥360 billion for the current business year through March due to sluggish sales as the coronavirus pandemic takes its toll.
It would be up from the ¥25.7 billion loss posted in the previous business year and the largest since a loss of ¥474.7 billion recorded in fiscal 2004, when the firm incurred massive recall costs.
As part of restructuring measures, the firm said it will stop producing its Pajero SUV at a plant run by its subsidiary Pajero Manufacturing Co. in Gifu in the first half of fiscal 2021 and close the plant.
Production of the Pajero for the domestic market ended last year, but the SUV has been manufactured for overseas markets. Mitsubishi Motors said it will halt the production of the Pajero completely and transfer production of other vehicles at the Gifu plant to its factory in Okazaki, Aichi Prefecture.
Pajero Manufacturing has a 44-year history in the town, after its predecessor Toyo Koki transferred its factory to Sakahogi in 1976. The town, with a population of 8,200, has promoted auto production as its main industry and took pride in the factory bearing the name of a legendary car that won the Paris-Dakar Rally a number of times.
According to the Sakahogi government, the town’s tax revenues related to Pajero Manufacturing made up 13 percent of total corporate tax revenues and 22 percent of real estate tax revenues in fiscal 2019, reaching 15 percent of the town’s overall tax revenues. As many as 12 companies in the town have direct transactions with the firm.
While expressing concern, Shibayama said new ways to develop the town will be explored. “We hope to attract a company of good standing to the town with the help of the Mitsubishi group,†he said.
