Illinois wins newest Japanese auto plant
Chicago — Yet another Japanese auto company has found a home in the United States. Illinois officials welcomed with jubilation the announcement Monday that Mitsubishi Motors Corporation and Chrysler Corporation would set up a joint venture in their state.
``I want to give some thanks,'' said Illinois Gov. James R. Thompson. The new plant will be located just west of Bloomington and Normal in downstate Illinois.
For the state, the new $500 million plant represents a plum in the fierce Midwest competition for new auto plants. Illinois lost out earlier this year in the race for perhaps the biggest plum of all. Tennessee won the honor of hosting General Motors' Saturn auto plant.
``The facility is not as large as Saturn,'' concedes Dave Powers, spokesman for the Illinois Department of Commerce and Community Affairs. ``But we feel it will have much the same impact.'' Dubbed Diamond-Star Motors, the facility is expected to employ 2,500 people by the time it starts turning out small cars in late 1988.
In joining forces with Chrysler, Mitsubishi is simply catching up with its competitors in Japan. Already, the three largest Japanese automakers have US plants. Toyota and General Motors have teamed up in Fremont, Calif.; Nissan is in Smyrna, Tenn.; Honda is producing small cars in Marysville, Ohio. Mazda, meanwhile, has broken ground for a plant in Flat Rock, Mich.
For Chrysler, too, ``it's a positive step,'' says David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan. The joint venture will allow the No. 3 US automaker to diversify its products while answering the challenge posed by the GM-Toyota deal and other international linkups.
These moves toward joint ventures and mergers are part of the internationalization of automobile production, Professor Cole says. As North America begins to feel the overcapacity already felt in Japan and Europe, companies need to spread the risk and diversify their operations. ``We are going to see a large number of ties between players in the market,'' he says.
In the short-term, however, the move could hurt Chrysler's other auto plant in Illinois, auto analysts speculate. The 180,000 small cars expected annually from the new joint venture could mean bad news for the 4,300 workers in Belvidere, who turned out 300,000 Omnis and Horizons in the 1985 model year.