Mitsubishi’s disassembly plan
BY IAN PORTER | 30th Jan 2009
The plant, which includes the newest major pressline in the country, will be sold in 12 auctions. More than 5000 items will go under the hammer.
The product development centre, test rigs and other equipment have already been auctioned.
The next two online auctions, covering the stamping and assembly line assets, will be held over seven days between February 2 and February 11.
The plant is being broken up after Mitsubishi stopped making the 380 model in March 2008. The company had accumulated trading losses of around $1.4 billion due to poor sales of its locally made models over several years.
Mitsubishi Motors Australia traded profitably in 2008 after manufacturing operations ceased – and before the global financial crisis – thanks to strong demand for its imported range, including the fast-selling Lancer models.
Mitsubishi invested $600 million to bring the 380 to market, and about $400 million of that went into the plant, including a major press installation, the Zero Line, which has two 2400 tonne Fagor presses and two 800 tonne Fagor presses, all linked with robotic materials handling and fitted with automatic die change systems.
Although this pressline weighs 600 tonnes and is three stories high, Ben Roden from auctioneer Graysonline believes there will be keen demand for the Zero Line.
“The prospects for selling that line are quite high, despite the difficulty of moving it," he said.
“It was made by a well-known manufacturer and it is a young asset.”Mitsubishi ended up making only about 30,000 cars in the three or so years the 380 was in production. That was initially targeted as the annual volume.
Mr Roden said the Zero Line would also be attractive because it would be available almost immediately, compared to the two-year lead time Mitsubishi had to give the manufacturer after ordering the line.
The auction which includes the press lines has been heavily promoted overseas and is expected to attract a lot of interest, Mr Roden said.
But bids for some equipment would be reduced by the fact that buyers had to factor in the cost of dismantling the asset, transporting it and re-installing it. Highly specialised or custom-built assets might also suffer deep discounts to new value, he said.
Mitsubishi would not hazard a guess as to the proceeds of the sale, although spokesman Rob Chadwick said the plant had received a "massive" amount of investment over the years.
However, he pointed out that, aside from the 380-related investment, some of the smaller presses on site dated back to the plant’s Chrysler days. Sir Robert Menzies opened Tonsley Park for Chrysler in 1964, and the US company sold it to Mitsubishi in 1980.
Mr Chadwick said Mitsubishi owned the land and the buildings on the site and that these too would be sold, although the exact form of the sale had not been determined.
“The State Government has indicated that it wants the site to remain as an industrial park to maintain manufacturing and employment in the southern suburbs,” he said.
“That may limit what some interested parties would be able to do with the site.”