LOS ANGELES -- Mitsubishi Motors North America Inc. will turn profitable again in the fiscal year beginning in April, says CEO Rich Gilligan.
The turnaround is being driven by lower costs and improving sales spurred by new products, Gilligan told Automotive News.
Still, the company would be earning a profit on a much lower volume base. Mitsubishi sales in the United States have been in free-fall since 2003, when they declined 26 percent compared with 2002. Last year, sales plunged another 37 percent to 161,609 units.
Gilligan says losses so far in the current fiscal year are 70 percent less than the year before.
Mitsubishi last made an operating profit in North America in the fiscal year ended March 31, 2003, when it posted black ink of $293.7 million.
"We are looking at every functional area for cost improvement opportunities," Gilligan says. "But cost reduction is not the answer to our revival."
In the past two years, Mitsubishi has laid off more than 250 of the approximately 1,000 employees at its Cypress, Calif., headquarters, mostly in the sales and credit departments.
In October 2004, the company cut 1,200 of the 3,100 jobs at its Normal, Ill., assembly plant and reduced operations to one shift.