TOKYO -- Embattled Japanese automaker Mitsubishi Motors more than doubled its full-year loss forecast Thursday as expected, as rumors swirled that its German chief executive would be pushed out as a result.
Dogged by financial woes stemming from loose credit controls at its North American finance unit, Mitsubishi has been forced to set aside a big extraordinary provision in what was meant to be the final year of three years of restructuring.
In a bid to strengthen its financial health, the company said it plans to hold a shareholders' meeting in April to seek authorization for a capital increase.
Chief Executive Rolf Eckrodt, under pressure for the sluggish performance, said: "I'm willing to fight and stay to do my duties, but it's up to the shareholders."
Japan's fourth-largest carmaker, owned 37 percent by DaimlerChrysler AG, now expects an operating loss of 105.0 billion yen ($985.2 million) for the year to March 31, instead of the $421 million forecast three months ago as sales in its most important U.S. market skidded.
Last year, it had a profit of $774 million.
Mitsubishi Motors said it now expected its North American operations to post an operating loss of $1.35 billion for the 2003/04 business year, and lowered its global sales forecast for the same period by 60,000 units to 1.52 million.
Its sagging fortunes are a big headache for DaimlerChrysler, which faces the more urgent task of reviving its tattered U.S. Chrysler arm.
The German-U.S. automaker had hoped that Mercedes veteran Eckrodt would lead a successful revival of a debt-laden, scandal-hit Mitsubishi Motors when it took a controlling stake in the company in 2000.
Until a year ago, it looked like the German chief executive's magic might have worked, but the tide has since turned again, forcing DaimlerChrysler to pour more cash into Mitsubishi.
Its net loss is now expected to be $673 million instead of $103 million, vs. a profit of $349 million last year.
After buying an additional 22 percent stake in its Japanese partner's truckmaking arm for $486 million recently, DaimlerChrysler, together with other Mitsubishi group companies, is expected to extend another $1.87 million soon to help the automaker raise cash to develop cars.
For the nine-month period to the end of December, Mitsubishi said revenues sank 4.3 percent to $17 billion.
National broadcaster NHK reported earlier Thursday that Eckrodt was likely to step down as early as April and his replacement would come from DaimlerChrysler.
The Japanese automaker said it had appointed Yoichiro Okazaki, managing director of Mitsubishi Heavy Industries Ltd., as its chairman, succeeding Takashi Sonobe, who died last October.