Mitsubishi Motors Corp. will cut close to 11,000 jobs, nearly a quarter of its workforce, and get a $4-billion infusion from its sister Mitsubishi companies and other investors under a revival plan its chief executive described Friday as its "last chance."
The Tokyo-based automaker is struggling to restore its credibility after recurring defect coverups and is racking up deep losses and debt amid plunging sales.
It was dealt an additional blow when U.S.-German automaker DaimlerChrysler, which owns 37% of Mitsubishi Motors, decided last month against offering more money for a turnaround.
Mitsubishi faces a tough fight, analysts said.
"The announced plan is so-so, perhaps better than so-so," said Koji Endo, an analyst with Credit Suisse First Boston in Tokyo.
Mitsubishi said its losses in its latest fiscal year, which ended March 31, came to $1.9 billion, triple the level forecast in February. Sales fell 35% to $22 billion.
For the current fiscal year, the company forecast a $2-billion loss on $20 billion in sales and acknowledged that it couldn't hope to return to profitability until fiscal 2005.
Under the revival plan, Mitsubishi will keep open its plant in Normal, Ill., but close an engine plant in Australia and a car plant in Japan.
The proposed job cuts will reduce the company's global workforce from 49,100 to 38,200 by April 2007.