Mitsubishi Motors considering ending U.S. auto production: sources

By Maki Shiraki and Paul Lienert

TOKYO/DETROIT (Reuters) - Mitsubishi Motors Corp, faced with declining demand in the United States and an expiring union contract at its only plant in North America, is considering ending U.S. auto production, two people familiar with the matter said.

The Nikkei business daily, which first reported the plan on Friday, said the proposed withdrawal from the Normal, Illinois plant was part of Mitsubishi Motors' strategic shift to the growing Asian market.

The company is in the process of mapping out the details of a withdrawal, the people told Reuters, declining to be identified because an official decision had yet to be reached.

Mitsubishi Motors, one of Japan's smallest automakers, on Friday declined to confirm or deny the report. "We are constantly reviewing our global manufacturing base, including (the U.S. plant), to maximize efficiency but we have reached no decision," it said in a statement.

At its peak in the early 2000s, the Normal plant built more than 200,000 cars a year. Last year, production of the Outlander sport utility vehicle totaled 69,178, according to Mitsubishi Motors.

Shares in the company were down 1.1 percent in morning trade in Tokyo, slightly underperforming the benchmark Nikkei index's 0.4 percent decline.

The Nikkei said Mitsubishi Motors would look for a buyer for the plant, which opened in 1988 as a joint venture with its then-partner, Chrysler. The report also said the Japanese firm would begin negotiations with labor representatives to maintain jobs for the plant's 918 workers, who are represented by the United Auto Workers union.

Normal Mayor Chris Koos said in an email, "I have heard nothing, and am trying to get information" from the plant, located about 140 miles (225 km) southwest of Chicago.

Kyle Young, vice president of UAW Local 2488, which represents the plant's workers, said the union's contract expires in August.

"We haven't heard anything," he said in a phone interview. "We're supposed to have negotiations coming up" on a new contract. In the meantime, "It's business as usual here - we're pumping out cars."

The Normal plant is the only Japanese-owned U.S. auto factory whose hourly workers are represented by the UAW.

On its website, Mitsubishi Motors said it contributes $120 million a year to the local economy in taxes, salaries and benefits.

(Additional reporting by Bernie Woodall in DETROIT and Chang-Ran Kim in TOKYO; Editing by Dan Grebler, David Gregorio and Kenneth Maxwell)