Mitsubishi to announce new vehicle for Normal

By Julie Wernau
Posted Feb. 4 at 12:01 a.m.

Mitsubishi Motors Corp. is poised to announce the production of a new vehicle at its Normal plant today in a deal backed by $30 million in government incentives. The deal is expected to breathe new life into a facility that, for years, has operated with an uncertain future.

The plant produces the Galant, Endeavor, Eclipse and Eclipse Spyder, among the oldest and least popular of the Mitsubishi line. The Japanese auto manufacturer has announced plans to phase out their production by 2014, a move that would have eventually meant layoffs in Normal and an end to Mitsubishi production in the U.S.

The local union has been begging the automaker to bring a new model to the plant, which once produced more than 200,000 vehicles per year and now ekes out fewer than 30,000 vehicles under lower demand. But Mitsubishi offered little certainty in recent years, offering workers short-term contracts as production slowed and staffing levels fell from 4,000 in 1998 to 1,300 today.

“We’ve been building those cars since 2003 without any substantial changes. Most models run four or five years and that’s their lifespan,” said Ralph Timan, president of UAW Local 2488.

“For the last couple of years, no one really knew what Mitsubishi was going to do,” said Patrick Mullen, a forecasting analyst at J.D. Power and Associates.

Last week, Mitsubishi’s announced plans for a stronger push in the U.S., where its market share was an abysmal .48 percent in 2010, according to Ward’s Auto. Those plans mostly hinge on hybrid and electric vehicles it plans to build overseas and ship to U.S. consumers hungry for fuel efficiency and green technology.

Mitsubishi is also expected to announce a public-private partnership today that would bring electric vehicle charging infrastructure to Normal, an initiative that would create a ready-made market for the auto manufacturer’s plug-in vehicles – seven of which are expected by 2015.

Mullen said the vehicle planned for the plant will likely be the next generation of one of Mitsubishi’s more popular models -– possibly the Outlander, Lancer or Outlander Sport -– which would do well to be produced in North America. With price of yen going up, Japanese companies aren’t making as much money off the cars they produce domestically. Produced in North America, those vehicles could see a lower price point, he said, and Mitsubishi is hoping that will translate to more U.S. and global sales.

A spokeswoman for Gov. Pat Quinn’s office said Mitsubishi will receive incentives topping $30 million, including a $28.9 million in EDGE tax credits (the auto manufacturer retains employee income tax withholdings over a 10-year period to be reinvested in operations). Mitsubishi will also receive $625,000 for training and $125,000 because the plant is in a business Enterprise Zone, she said.

“Gov. Quinn has made no secret of his commitment to create and retain jobs in Illinois,” said spokeswoman Annie Thompson.

Making an announcement in the Bloomington-Normal area gives Quinn, a Democrat, a chance to roll out his latest plans to help the state’s jobs climate in the back yard of his vanquished Republican challenger, Sen. Bill Brady, who lives in Bloomington.

Their campaign included pointed arguments over how state government should take steps to bolster the state’s economy. Now Quinn will be able to give Brady a first-hand look at what the administration will do to help the central Illinois car plant.

Mitsubishi and Quinn’s office would give no further details until after the announcement.

jwernau@tribune.com

– Ray Long contributed to this report.

 

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