Mitsubishi to sell its European plant for 1 euro

PanARMENIAN.Net - Japan's Mitsubishi Motors said Wednesday, July 11, that it will sell its sole European plant to a Dutch industrial group for one euro in a deal that calls on the buyer to keep 1,500 jobs at the facility, AFP reports.

The automaker had earlier this year announced plans to end production at the factory in the southern Netherlands by the end of the year, blaming a difficult operating environment in the debt-hit continent.

In a statement Wednesday, the Japanese firm said it would sell Netherlands Car BV, or NedCar, to VDL Groep, which makes buses and a range of industrial products, for a token one euro ($1.20) in exchange for keeping the plant running.

"(Mitsubishi) had carried out discussions with the related parties to explore the possibility of the future continuation of NedCar while making it a top priority to assure the employment of its employees," it said.

"As a result, (Mitsubishi) has reached a principal agreement with VDL on the share transfer," it added.

Mitsubishi said it expected to book a 28 billion yen ($353 million) loss on the plant to be included in its current fiscal year earnings through March 2013.

"We wanted to avoid a situation where the workers would lose their jobs after we cease production," a Mitsubishi spokesman told AFP.

Mitsubishi announced in February it was planning to halt production at the plant in Born by the end of this year.

Soon afterwards, workers staged a one-day strike at the plant, located about 180 kilometers (110 miles) southeast of Amsterdam, with labor unions demanding that Mitsubishi work with the Dutch government to find a buyer.

The Japanese firm's president said he was willing to sell the plant for one euro if the new owner could guarantee workers would remain employed.

The Japanese carmaker produces the Colt subcompact and the Outlander sports utility models at the unit, which used to be a joint venture with Sweden's Volvo.

Output at NedCar, which was established in 1991, has remained sharply below its annual production capacity of 200,000 units, contributing to Mitsubishi's operating loss in Europe. Production was 40,739 units in 2011, according to the automaker.