Federal Government Props Up Mitsubishi

The Federal Government announced today that it is to provide $35 million of assistance to Mitsubishi Motors in 2004-5.

The move will promote job growth in Adelaide and encourage the car-maker to retain its Australian operations.

The decision will be seen by many to be at odds with the philosophy of a government that preaches the free enterprise mantra of competition and efficiency.

Text of statement from Prime Minister John Howard announcing the decision to provide $35 million of support to Mitsubishi.

I am pleased to announce that Mitsubishi Motors Corporation has accepted a $35 million offer of assistance from the Commonwealth Government. This assistance will facilitate a major new investment in Mitsubishi’s Adelaide plant and the establishment of a global research and development centre in South Australia.

The Commonwealth’s decision reflects the important role Mitsubishi plays in the South Australian economy and Mitsubishi’s commitment to make Adelaide an integral part of its global operations, including through the research and development facility.

The Commonwealth’s additional $35 million of assistance will be available from 2004-05 and will be contingent on Mitsubishi meeting specific commitments on the timing and scale of its investment.

In particular, the assistance is conditional on the creation of an additional 900 direct jobs in Mitsubishi’s Adelaide manufacturing operations and the establishment of a global research and development centre in South Australia with ongoing employment of approximately 300 people.

The upgrade of Mitsubishi’s Adelaide manufacturing facilities will facilitate the production of two new models from 2005, including a new generation Magna and a luxury long wheelbase version.

The Commonwealth assistance announced today is in addition to the more than $200 million Mitsubishi is expected to receive from the government’s Automotive Competitiveness and Investment Scheme to 2005. The South Australian Government will also provide $50 million in cash and ‘in kind’ assistance to Mitsubishi to facilitate this investment.

Mitsubishi’s decision to continue manufacturing in Australia will be welcomed by the company’s 3,200 strong Australian workforce. The decision to undertake a substantial new investment in Australia also reflects the company’s confidence in the Australian automotive industry and the effectiveness of the Government’s economic and industry policies.

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