Mitsubishi, Union OK Tentative Contract

By JAN DENNIS, Associated Press Writer


NORMAL, Ill. - Mitsubishi Motors and union leaders at its only U.S. plant have agreed to a tentative contract extension that will aid the troubled automaker's efforts to rebound from a global sales skid fueled by scandals and recalls, company officials said Wednesday.

Terms of the 31-month deal between Mitsubishi Motors North America and the  United Auto Workers were not disclosed. The current four-year contract expires at midnight Thursday, but work will continue at the Normal plant pending a Sunday vote by about 2,800 UAW members, the company said.

President and Chief Executive Officer Rich Gilligan called the deal an example of the "courteous and respectful yet open, honest and frank partnership" between the union and the automaker. "Our union workers join in putting the customer first," Gilligan said in a statement.

UAW Local 2488 officials did not immediately return a call for comment Wednesday on the agreement, reached after talks that began in June.

Mitsubishi Motors Corp. slashed 1,200 jobs at the Normal plant last fall as part of a worldwide revival plan that the company, based in Japan, has called its last chance to survive as an automaker.

Sales have sagged since the company acknowledged five years ago that it had systematically hidden auto defects for more than two decades to avoid recalls in Japan. The company also has been battered by overly extending loans to buyers with bad credit in the United States.

Gilligan said a new-generation Eclipse coupe that hit dealer showrooms this year has bolstered sales. Sales of the redesigned Eclipse, made in Normal, are running about 65 percent above the company's projections, he said.

The company will launch a new Raider pickup this fall, followed next spring by a new Eclipse Spyder convertible assembled at the Normal plant. Three additional new models are planned over the next 18 months.

Mitsubishi's Galant sedan and Endeavor sport utility vehicle also are manufactured at the Normal plant.

Shares of Mitsubishi climbed 39 cents, or 3.9 percent, to $10.33 in afternoon trading on the  New York Stock Exchange, surpassing the 52-week range of $7.95 to $10.29.