Phillips quiet on Pajero future

IS Mitsubishi’s decision to close the factory in Japan where the Pajero is built good or bad news for the future of the company’s Australian manufacturing operations? It’s a question which local boss Tom Phillips is not responding to at the moment, describing reports of the closure of the Pajero plant in Gifu prefecture as “conjecture”.

The report is potentially significant for Australia’s survival because Mr Phillips believes that local manufacture of the popular Mitsubishi SUV alongside the next generation Magna would guarantee the future of the Adelaide plants, Tonsley Park and Lonsdale.

He has pitched the idea of making Australia the headquarters for worldwide Pajero production to MMC headquarters. Pajero is popular in Australia, the USA and the Middle East but sells in only small numbers in Japan.

Two years ago the plan was announced for a long wheelbase luxury sedan to be built alongside Magna in Adelaide, but that has been almost certainly scotched.

The Pajero plant closure is said to be part of the survival plan being drawn up by Andreas Renschler, the Smart boss sent in at the head of a study team by controlling MMC shareholder DaimlerChrysler to decide where the red ink-stained company goes from here.

He will deliver his findings to an extraordinary meeting of shareholders on April 30.

Mr Renschler’s arrival and the “on the edge” comments by the man he will replace as MMC president and chief executive officer, Rolf Eckrodt, have revived speculation about the future of Mitsubishi as a manufacturer in Australia.

MMC spokesmen in Japan are insisting there is no short term threat to Australia.

“It’s still just conjecture,” Mr Phillips said of the Pajero plant closure report. “We won’t know anything before the end of the month. We are just getting on with life.

“We are not saying it is not going to be proved right, but at this stage we haven’t seen any of that.

“Maybe they will tell us a bit before April 30 if anything drastic is going to happen but we are assuming there won’t be.”

According to the Japanese reports, production of the Pajero will be shifted from Gifu prefecture to a factory in Aichi prefecture, which is running at half of its capacity. Mitsubishi executives said they had not decided whether to fire the 1100 Gifu workers or move them to Aichi.

Whether Aichi is the new permanent home for Pajero, or merely a pit stop on the way to Adelaide, is not known.

The only confirmed fall-out from Mr Renschler’s arrival in Tokyo has been the departure of MMC sales chief Steve Torok back to DaimlerChrysler, officially carrying the can for the disastrous ‘Triple 0’ financing scheme in the US, which has been a key factor in this whole financial mess.

It’s a blow for Mr Phillips because Mr Torok was MMAL’s staunchest supporter.

* Meanwhile, DaimlerChrsyler, which owns 37 per cent of MMC, may raise the stake to more than 50 per cent by the end of 2007, the Mainichi newspaper in Japan has reported, without saying where it obtained the information.

DCX will probably spend about $US6.6 billion on the share purchase and other bailout plans, the report said.

MMC's share price kicked on the Tokyo stockmarket this week as a result of the news.