Mitsubishi group companies vowed yesterday to stick by struggling Mitsubishi Motors after Daimler-Chrysler said it had given up on the auto maker and would try to sell its 37 percent stake.
The decision by the German-American company, which took even Mitsubishi Motors by sur-prise, left its strategy to become a global car maker in disarray and threw the future of the money-losing Japanese firm into doubt.
PHOTO: AFP
DaimlerChyrsler said on Thursday it would not participate in a rescue capital increase planned by Mitsubishi Motors Corp (MMC) because it could not agree on an acceptable deal with other shareholders in the Mitsubishi group.
It also said it would not provide any further financial support to Mitsubishi, the only unprofitable carmaker in Japan.
But three Mitsubishi group firms -- Mitsubishi Heavy Industries, Mitsubishi Corp and Bank of Tokyo-Mitsubishi -- said they would continue to support the company.
The three hold a combined 23 percent stake in MMC.
A DaimlerChrysler spokesman in Germany said the company's stake in Mitsubishi Motors would be booked as discontinued business until a buyer could be found.
"This clearly means separation," the spokesman said.
The decision was reached at an extraordinary meeting of the DaimlerChrysler supervisory and management boards on Thursday and just two weeks after chief executive Juergen Schrempp defended his global strategy in front of angry shareholders.
Mitsubishi had been expected to seek shareholder approval on April 30 for a ?700 billion (US$6.39 billion) bailout.
Sources and media had said DaimlerChrysler would fund more than half of that, with plans to consolidate the Japanese company into its books within a few years. Mitsubishi group firms were expected to provide more than ?100 billion.
Mitsubishi Motors said it was evaluating the situation and that chief executive Rolf Eckrodt was in touch with DaimlerChrysler and Mitsubishi group companies.
"The move will leave Mitsubishi Motors with no choice but to shrink its business operations," said Hajime Yagi, a general manager at Meiji Dresdner Asset Manage-ment in Tokyo.
Reeling from losses on easy-term car loans in the US, the maker of the Pajero sport utility vehicle is expecting a net loss of ?72 billion for the 12 months to March 31.
It had a profit of ?37.36 billion the previous year.
Mitsubishi Motors' net automotive debt stood at around ?726 billion 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," one industry source said.
Japanese government officials also expressed concern.
DaimlerChrysler bought the stake in Mitsubishi over three years ago with a view to expanding in Asia, and the decision to cut its losses will intensify pressure on Schrempp, who faced calls to resign at the annual shareholder meeting on April 7.
LONG FLIGHT: The jets would be flown by US pilots, with Taiwanese copilots in the two-seat F-16D variant to help familiarize them with the aircraft, the source said The US is expected to fly 10 Lockheed Martin F-16C/D Block 70/72 jets to Taiwan over the coming months to fulfill a long-awaited order of 66 aircraft, a defense official said yesterday. Word that the first batch of the jets would be delivered soon was welcome news to Taiwan, which has become concerned about delays in the delivery of US arms amid rising military tensions with China. Speaking on condition of anonymity, the official said the initial tranche of the nation’s F-16s are rolling off assembly lines in the US and would be flown under their own power to Taiwan by way
‘OF COURSE A COUNTRY’: The president outlined that Taiwan has all the necessary features of a nation, including citizens, land, government and sovereignty President William Lai (賴清德) discussed the meaning of “nation” during a speech in New Taipei City last night, emphasizing that Taiwan is a country as he condemned China’s misinterpretation of UN Resolution 2758. The speech was the first in a series of 10 that Lai is scheduled to give across Taiwan. It is the responsibility of Taiwanese citizens to stand united to defend their national sovereignty, democracy, liberty, way of life and the future of the next generation, Lai said. This is the most important legacy the people of this era could pass on to future generations, he said. Lai went on to discuss
MISSION: The Indo-Pacific region is ‘the priority theater,’ where the task of deterrence extends across the entire region, including Taiwan, the US Pacific Fleet commander said The US Navy’s “mission of deterrence” in the Indo-Pacific theater applies to Taiwan, Pacific Fleet Commander Admiral Stephen Koehler told the South China Sea Conference on Tuesday. The conference, organized by the Center for Strategic and International Studies (CSIS), is an international platform for senior officials and experts from countries with security interests in the region. “The Pacific Fleet’s mission is to deter aggression across the Western Pacific, together with our allies and partners, and to prevail in combat if necessary, Koehler said in the event’s keynote speech. “That mission of deterrence applies regionwide — including the South China Sea and Taiwan,” he
UNPRECEDENTED: In addition to the approved recall motions, cases such as Ma Wen-chun’s in Nantou are still under review, while others lack enough signatures The Central Election Commission (CEC) announced yesterday that a recall vote would take place on July 26, after it approved the first batch of recall motions targeting 24 Chinese Nationalist Party (KMT) lawmakers and Hsinchu Mayor Ann Kao (高虹安). Taiwan is in the midst of an unprecedented wave of mass recall campaigns, following a civil society push that echoed a call made by Democratic Progressive Party (DPP) caucus whip Ker Chien-ming (柯建銘) in January to initiate signature drives aimed at unseating KMT legislators. Under the Civil Servants Election and Recall Act (公職人員選舉罷免法), Taiwanese can initiate a recall of district-elected lawmakers by collecting
RSS