DaimlerChrysler has expressed interest in taking control of Japanese manufacturer Mitsubishi, but there are certain conditions.
DaimlerChrysler has expressed interest in taking control of Japanese manufacturer Mitsubishi. The announcement has already boosted Mitsubishi’s shares.
Mitsubishi Motors shares rose nine per cent to their highest level in nine months. However, the deal depends on whether Japan’s fourth largest carmaker can return to profit soon. Mitsubishi lost R23 billion in 2000/01.
DaimlerChrysler chief executive officer Jürgen Schrempp told magazine that they might takeover Mitsubishi as early as 2003. A spokesman for the company told Detroit News that the report was accurate.
“We could take Mitsubishi over as soon as 2003,” Schrempp told the magazine. “But Mitsubishi must first return to profit and cut its debt.” Schrempp also said the takeover was “logically a long-term goal”.
Last month Mitsubishi said former DaimlerChrysler executive Rolf Eckrodt would become its president and chief executive in June (he is currently chief operating officer).
The German manufacturer acquired a 34 per cent stake in Mitsubishi in 2000. This was later increased to 37 per cent, with the option of a full takeover within three years.
Mitsubishi Motors’ domestic sales have fallen every month since July 2000 after the company admitted to covering up customer complaints for two decades. The automaker was forced to recall and repair two million vehicles as a result.
Mitsubishi is now carrying out a drastic restructuring plan designed to cut 9 500 jobs – 14 per cent of its total workforce – in an attempt to recover from the cover-up scandal.