 Mitsubishi Motors was given a $4bn lifeline last month |
Japanese carmaker Mitsubishi Motors is to lay off 1,200 workers at its only US factory later this year as part of a worldwide cost-cutting drive. The measure is part of a radical restructuring of the firm's business forced upon it by a $9bn(�4.8bn) debt a series of costly recall scandals.
More than 30% of workers at its plant in Illinois will be let go in October.
Mitsubishi received a $4bn(�2.7bn) rescue package earlier this year after DaimlerChrysler removed its support.
The company will cut annual capacity by 22% to 140,000 units.
Mitsubishi's US sales fell by more than 27% in the first six months of the year.
The factory produces Galant, Eclipse and Endeavour models for its parent company but a long term contract for DaimlerChrysler expires next year and will not be renewed.
In a statement, Rich Gilligan, president and chief operating officer of Mitsubishi's North American Motoring Division, said: "This was a very difficult decision but we believe it is necessary for the long term success of the company."
Mitsubishi plans to cut 11,000 jobs worldwide, closing entire operations in Japan and Australia.
Mitsubishi is Japan's fourth largest but only unprofitable carmaker. It suffered a loss of 215bn yen($1.9bn, �1.0bn) in the year to March 2004.
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