Mitsubishi Closing Normal IL factory.

[SteveG1988]

The Home of The Galant and Eclipse is being sold off soon.

http://www.wandtv.com/story/29625936/mitsubishi-to-halt-production-at-normal-illinois-plant

http://www.usatoday.com/story/money/cars/2015/07/23/mitsubishi-normal-cars-factory/30593593/

[Stratuscaster]

For what it's worth, the Galant hasn't been built in Normal for 3 years; the Eclipse for 4 years.

Current product built in the Normal plant is the Outlander Sport.

Normal was also the home to the Endeavor, along with the Dodge Avenger Coupe, Chrysler Sebring Coupe, Dodge Stratus Coupe, Plymouth Laser coupe, and Eagle Talon coupe.

Was only a matter of time, really.

[SteveG1988]

I wonder who would want to move in, the plant is fairly modern. I could see Chrysler just buying it from Mitsubishi, as they have a distrobution network in that area for their Belvidere Plant.

[SP Cook]

The interesting thing to see is if Mitsubishi leaves the US market.  Since the 1980s pretty much the deal with all "foreign" manufacturers has been that they have to make some of their cars in North America.  Obviously all would really prefer to not do that.  If Mitsubishi can become the only non-luxury/non-niche brand that simply imports all its products, then that is a policy change from DC, and others will follow.

[SteveG1988]

The interesting thing to see is if Mitsubishi leaves the US market.  Since the 1980s pretty much the deal with all "foreign" manufacturers has been that they have to make some of their cars in North America.  Obviously all would really prefer to not do that.  If Mitsubishi can become the only non-luxury/non-niche brand that simply imports all its products, then that is a policy change from DC, and others will follow.

Kia and Hyundai import most of their vehicles.

It was an agreement that lasted until the 1990s I beleive, and is no longer in effect. The only vehicles that they have to really build here are pickups and vans. 25% tax from the Johnson Administration called the Chicken Tax. Any commercial vehicle that is imported from outside North America is considered to be taxed at 25%, that is why the brat had rear seats.

[SP Cook]

The interesting thing to see is if Mitsubishi leaves the US market.  Since the 1980s pretty much the deal with all "foreign" manufacturers has been that they have to make some of their cars in North America.  Obviously all would really prefer to not do that.  If Mitsubishi can become the only non-luxury/non-niche brand that simply imports all its products, then that is a policy change from DC, and others will follow.

Kia and Hyundai import most of their vehicles.

And, like everybody else except Mitsubishi make some in North America. 

[Stratuscaster]

I wonder who would want to move in, the plant is fairly modern. I could see Chrysler just buying it from Mitsubishi, as they have a distrobution network in that area for their Belvidere Plant.

A friend in the industry tells me that the plant's condition is actually not all that great. The plant itself is 30 years old; it opened in 1985.

The other consideration is the rather high tax rate in Illinois compared to other states.

[Brandon]

I wonder who would want to move in, the plant is fairly modern. I could see Chrysler just buying it from Mitsubishi, as they have a distrobution network in that area for their Belvidere Plant.

A friend in the industry tells me that the plant's condition is actually not all that great. The plant itself is 30 years old; it opened in 1985.

The other consideration is the rather high tax rate in Illinois compared to other states.

However, that said, Belvidere is older by far.  The only reason Chrysler got out of Diamond-Star Motors (the Normal plant) is that they ended the relationship with Mitsubishi.  IIRC, one of the biggest reasons for placing I-39 along the US-51 corridor was the connection between the Belvidere and Normal plants.  I could see Chrysler taking the Normal plant over as they are in need of the capacity, and seem to want capacity near what they already have (hence why the Newark, Delaware plant got the ax and the Michigan plants were kept).

[SteveG1988]

I wonder who would want to move in, the plant is fairly modern. I could see Chrysler just buying it from Mitsubishi, as they have a distrobution network in that area for their Belvidere Plant.

A friend in the industry tells me that the plant's condition is actually not all that great. The plant itself is 30 years old; it opened in 1985.

The other consideration is the rather high tax rate in Illinois compared to other states.

However, that said, Belvidere is older by far.  The only reason Chrysler got out of Diamond-Star Motors (the Normal plant) is that they ended the relationship with Mitsubishi.  IIRC, one of the biggest reasons for placing I-39 along the US-51 corridor was the connection between the Belvidere and Normal plants.  I could see Chrysler taking the Normal plant over as they are in need of the capacity, and seem to want capacity near what they already have (hence why the Newark, Delaware plant got the ax and the Michigan plants were kept).

Chrysler did still have some Mitsubishi products until recently. The Avenger was built off the Lancer.

[Brandon]

I wonder who would want to move in, the plant is fairly modern. I could see Chrysler just buying it from Mitsubishi, as they have a distrobution network in that area for their Belvidere Plant.

A friend in the industry tells me that the plant's condition is actually not all that great. The plant itself is 30 years old; it opened in 1985.

The other consideration is the rather high tax rate in Illinois compared to other states.

However, that said, Belvidere is older by far.  The only reason Chrysler got out of Diamond-Star Motors (the Normal plant) is that they ended the relationship with Mitsubishi.  IIRC, one of the biggest reasons for placing I-39 along the US-51 corridor was the connection between the Belvidere and Normal plants.  I could see Chrysler taking the Normal plant over as they are in need of the capacity, and seem to want capacity near what they already have (hence why the Newark, Delaware plant got the ax and the Michigan plants were kept).

Chrysler did still have some Mitsubishi products until recently. The Avenger was built off the Lancer.

It was a shared platform, not a shared car.  The Avenger, Sebring, Caliber, Patriot, and Compass share a platform with the Lancer, but none of them share any parts with the Lancer.  The Avenger was built in Sterling Heights, where the 200 is now.  That has always been a Chrysler only factory.  The last product Chrysler shared with Mitsubishi was the Chrysler Sebring coupe (production ended in 2005).  The sedan and convertible were Chrysler only (no Mitsubishi involvement).  A shared platform only means the companies shared the initial ideas with common design, engineering, and production efforts, but not necessarily parts or any common exterior or interior design elements.

[hotdogPi]

Maybe things that are Normal are out of style, and every teenager and person in their 20s wants newfangled technology that definitely could not be described as "Normal".

[Brandon]

Maybe things that are Normal are out of style, and every teenager and person in their 20s wants newfangled technology that definitely could not be described as "Normal".

What?

Normal is named for the school, as it was the location of the Illinois Normal School (teacher's school), now Illinois State University.  It also has the distinction of being only one of the 19 towns (yes, it is Town of Normal) in Illinois.  Very much not normal.

[Duke87]

The interesting thing to see is if Mitsubishi leaves the US market.  Since the 1980s pretty much the deal with all "foreign" manufacturers has been that they have to make some of their cars in North America.  Obviously all would really prefer to not do that.  If Mitsubishi can become the only non-luxury/non-niche brand that simply imports all its products, then that is a policy change from DC, and others will follow.

If NAFTA has enabled automakers to move plants to Mexico, TPP will likely do the same for East Asia. At which point Mitsubishi likely will not be alone in withdrawing from US-based manufacturing.

[Desert Man]

well, another US automobile manufacturing plant closes. Despite Japanese car companies established plants to build cars for the US market, they often don't stay open for long. The problem is the US has a difficulty competing with rising markets like China, India, Mexico and Brazil to name a few, in attracting jobs and factories away from our country to theirs.

[Brandon]

well, another US automobile manufacturing plant closes. Despite Japanese car companies established plants to build cars for the US market, they often don't stay open for long. The problem is the US has a difficulty competing with rising markets like China, India, Mexico and Brazil to name a few, in attracting jobs and factories away from our country to theirs.

Actually, they do stay open for a very long time.  Honda has had their Marysville, Ohio plant since 1982.  Mitsubishi has had a lot of trouble in the US market.  Dealers are far and few inbetween, they don't sell a lot of vehicles, and it's not worth their while to be in the US and Canadian markets with the lack of market share they have.  I strongly suspect the clock is ticking on when, not if, but when Mitsubishi leaves the US and maybe Canadian markets.  It's the same thing that's besot other automakers in the past, Yugo, Renault, British Leyland, Dihatsu, Daewoo, and many other foreign automakers, not to name some homegrown ones like Studebaker.

[briantroutman]

Despite Japanese car companies established plants to build cars for the US market, they often don't stay open for long.

I don't think that statement is accurate in the least. Look at how many Japanese auto assembly plants have opened in America over the last 35 years and are still going strong.

Honda - Marysville, Ohio (1982)
Nissan - Smyrna, Georgia (1983)
Toyota - Georgetown, Kentucky (1986)
Subaru - Lafayette, Indiana (1988)
Honda - East Liberty, Ohio (1989)
Honda - Lincoln, Alabama (2001)
Nissan - Canton, Mississippi (2003)
Toyota - San Antonio, Texas (2006)
Honda - Greensburg, Indiana (2008)
Toyota - Blue Springs, Mississippi (2011)

In the same time period, I can think of only two US auto plants associated with a foreign nameplate that ceased operation.

One was Volkswagen Westmoreland near New Stanton, Pennsylvania. The reasons for this plant's demise are endless–the plant was obsolete when it opened, body parts had to be trucked in from a separate stamping plant hours away in West Virginia, and so on.

The second was NUMMI (New United Motor Manufacturing, Inc.), a joint venture between GM and Toyota in Fremont, California. The plant had previously been one of GM's worst performing plants from its opening in 1962 until it was closed twenty years later, so it seemed to be the ideal candidate site for GM to learn how Toyota's process management systems could produce a superior quality product. Beginning in 1984, both companies co-owned the factory, but Toyota ran the show, and they produced a Toyota product, the Corolla. At the end of the assembly line, some cars were badged as Corollas and others as Chevrolet Novas (and later, Geo Prizms). Despite the products being well-received and sales successes, GM pulled out in 2009 amidst their own financial collapse, and Toyota decided to sell the plant to Tesla.

With Westmoreland, NUMMI, and Normal as examples, it seems like the recipe for death is "pick two of the following three" .

1. Joint venture with US automaker
2. Product irrelevant in the US marketplace
3. Unionized workforce

Volkswagen had 2 and 3; NUMMI had 1 and 3. But Mitsubishi scores a perfect 1, 2, 3.

[Stratuscaster]

But they at least moved on from 1 and 2.

Mitsu's joint venture with Chrysler ended some time ago (1994, as I recall) and they killed off the Eclipse (2-door FWD coupes were a shrinking market), the Galant (perennial last-place finisher in most comparos and it's replacement was deemed too expensive - Mercedes forced it upon Chrysler to become the 2007/8 Avenger & Sebring, and the Endeavor (their "Highlander fighter" SUV that never measured up).

They replaced it with the Outlander Sport - an entry in the relevant and rapidly growing compact SUV market.

Their own financial frailty and poor customer service history (0/0/0 financing and hiding 20 years of complain records) led to their downfall. Daimler was all too eager to bring them into the DaimlerChrysler fold and anoint them the small-car development group, but after they got a hold of the financials opted to walk away.

They've survived elsewhere on their small cars and pickups, and partnerships with Peugeot and Citroen in Europe.

[SteveG1988]

Despite Japanese car companies established plants to build cars for the US market, they often don't stay open for long.

I don't think that statement is accurate in the least. Look at how many Japanese auto assembly plants have opened in America over the last 35 years and are still going strong.

Honda - Marysville, Ohio (1982)
Nissan - Smyrna, Georgia (1983)
Toyota - Georgetown, Kentucky (1986)
Subaru - Lafayette, Indiana (1988)
Honda - East Liberty, Ohio (1989)
Honda - Lincoln, Alabama (2001)
Nissan - Canton, Mississippi (2003)
Toyota - San Antonio, Texas (2006)
Honda - Greensburg, Indiana (2008)
Toyota - Blue Springs, Mississippi (2011)

In the same time period, I can think of only two US auto plants associated with a foreign nameplate that ceased operation.

One was Volkswagen Westmoreland near New Stanton, Pennsylvania. The reasons for this plant's demise are endless–the plant was obsolete when it opened, body parts had to be trucked in from a separate stamping plant hours away in West Virginia, and so on.

The second was NUMMI (New United Motor Manufacturing, Inc.), a joint venture between GM and Toyota in Fremont, California. The plant had previously been one of GM's worst performing plants from its opening in 1962 until it was closed twenty years later, so it seemed to be the ideal candidate site for GM to learn how Toyota's process management systems could produce a superior quality product. Beginning in 1984, both companies co-owned the factory, but Toyota ran the show, and they produced a Toyota product, the Corolla. At the end of the assembly line, some cars were badged as Corollas and others as Chevrolet Novas (and later, Geo Prizms). Despite the products being well-received and sales successes, GM pulled out in 2009 amidst their own financial collapse, and Toyota decided to sell the plant to Tesla.

With Westmoreland, NUMMI, and Normal as examples, it seems like the recipe for death is "pick two of the following three" .

1. Joint venture with US automaker
2. Product irrelevant in the US marketplace
3. Unionized workforce

Volkswagen had 2 and 3; NUMMI had 1 and 3. But Mitsubishi scores a perfect 1, 2, 3.

You forgot Mazda.

Formerly the Ford Michigan Casting Center (72-81) Mazda got ahold of the factory in Flat Rock Michigan in 87 and until 1992 was the sole user of it. Later ford bought back 1/2 of it and 1992-2012 it was a joint venture, until Mazda pulled the Mazda 6 Production from it and just turned it over to ford.

I could see Mazda buying the Normal factory, just to get some extra capacity for car production. Their only North American factory is in Mexico now, and it will soon be cranking out the Yaris.

[briantroutman]

You forgot Mazda.

How could I forget Mazda? I once owned a Protegé–although that was built in Japan, of course. But even so, that leaves two Japanese assembly plants in America transferred to different ownership versus ten still going strong. And on my impromptu list of the three key death factors, I'd say Flat Rock fits 1 and 3.

[cpzilliacus]

3. Unionized workforce

The presence of the UAW is enough to prevent many auto manufacturing plants from locating in an area.

Like it or not, the UAW, along with mismanagement by the U.S. manufacturers, has led to things being the way that they are in cities like Detroit and Flint.

[SteveG1988]

Subaru of Indiana is still going strong. And that factory has built Toyota,Honda,Subaru,Isuzu vehicles. I guess not having a union is a key to keeping the factory going. I mean ford pulled out of Lorain Ohio, Honda has a factory not far away, close enough that they used the Lorain factory parking lot for storing inventory.

http://www.forbes.com/sites/billkoenig/2014/02/15/uaw-despite-new-tactics-gets-same-old-results-with-volkswagen-vote/

[Rothman]

The race to bottom for American workers continues.

[getemngo]

Mitsubishi has suffered a serious sales decline in the US since its peak in the 90s (sorta like Volvo), but they're not in immediate danger of leaving the US market. The new Mirage, this ugly beast...



...has been wildly outselling their expectations, and it's been enough that the brand's June 2015 US sales are 32% higher than its June 2014 sales, and Mitsubishi sells more cars here than Mini or the Fiat brand. The closure of the Normal factory has more to do with the current exchange rate between the dollar and the yen. It's cheaper for them to build in Japan now.

Granted, Mitsubishi still has a lot to work on here, and a lot of problems - from the total failure of the i-MiEV to the impending discontinuation of the Evo. Since they've given up on performance, they need to find a new direction, and fast. But if one hideous model is enough for them to be growing again, it ain't over yet.

[Stratuscaster]

Part of the Mirage's success has to do with the fact that it's the 3rd lowest priced car sold in the US, behind the Nissan Versa and the Chevy Spark.

Mitsu's top seller this YTD is the Outlander Sport.

[briantroutman]

A few months ago, I read Where the Suckers Moon by Randall Rothenberg, a book that chronicles a period in Subaru of America's history from about 1990-1993. It's primarily focused on their advertising and the company's relationship with its ad agency at the time, but in the course of setting up the story, the author reveals some insights into the sales of the lower-tier Japanese marques: Subaru, Mitsubishi, and Isuzu.

With higher brand awareness scores and a reputation for unmatched quality, the top-tier Japanese makes (Honda and Toyota, and slightly behind, Nissan) were nearly always able to sell cars faster than they could build them. As a result, their dealers often had a take-it-or-leave-it kind of attitude and were happy to skim the best customers with the highest incomes and credit ratings of the top of the buyer pool. The dreck who sank to the bottom but still yearned for a Japanese car would sulk off to the Subaru or Mitsu dealer where the salesman would promise that an unloved overstock Loyale or Mirage was "just as good as a Civic"  and work out a financing deal despite the customer's bad credit.

Subaru survived in the US primarily because they focused on their niche of quirky AWD vehicles. Other than the Evo, which targets the same market as the STI, I have trouble defining what Mitsubishi's market differentiator is. I think they're in the still in the same "second tier, cheap Japanese car"  trap that they shared with Subaru thirty years ago. Now, the trouble is that those customers are going to Kia or Hyundai instead.