Mitsubishi Workers Earn A Normal Reprieve
Mitsubishi’s lone manufacturing plant in North America is based in Normal, IL, what was originally developed as a jointly owned facility with Chrysler. Mitsubishi bought out Chrysler’s share of the plant a few years back, giving the Japanese automaker sole control of the facility.
The former DiamondStar collaboration has been struggling lately, falling far short of reaching its annual build capacity of 100,000 units. The Illinois plant produces Galant sedans, Endeavor SUVs, Eclipse coupes and Spyder convertibles, but production is down by 24% this year. Consumers just aren’t in the buying mood and for those who are Toyota, Honda, and Nissan are the vehicles of choice for them.
What could have turned out to be a plant closing has now been averted, thanks to the efforts of Mitsubishi’s union workers who decided it was better to accept a pay and benefits cut than risk seeing their plant close. Under a labor agreement ratified on October 4th, the plants 1260 workers agreed to pay more for their share of health costs while permitting Mitsubishi to trim their hourly wage from $28.50 to $24.
Though Japanese manufacturers are loathe to close an automotive plant, Mitsubishi’s position has been a bit more precarious of late. Over the past five years, the company has seen its sales decline by 63% in the US resulting in a 63% drop in plant employment. Earlier this year Mitsubishi closed an Australian plant and would have done the same thing in Illinois without the benefit of a revised labor agreement.
Under the terms of the agreement, Mitsubishi has pledged that they will keep the plant open through August 2012 while the union has agreed to a two-tier wage system where new assembly line hires can start at $14 per hour or $20 per hour for maintenance workers. Any recalled workers will be taken back at a lower wage rate, what amounts to be 70% of the new rate or $16.80 per hour.
(Source: Bloomberg News)
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