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Mitsubishi Aircraft closing overseas locations, cutting jobs

13 Comments

Mitsubishi Heavy Industries is cutting hundreds of jobs in Washington state and shuttering its U.S. operations for the troubled SpaceJet project, the company said Friday.

“Due to the budget directives, Mitsubishi Aircraft will close its overseas locations and consolidate activities at its headquarters in Nagoya, Japan,” company spokesman Jeff Dronen told The Seattle Times via email. “This will impact the majority of our employees in the United States.”

The Mitsubishi Aircraft U.S. headquarters in Renton will close, and flight test operations in Moses Lake will cease, he said.

Dronen said Mitsubishi will retain “a small crew” at Moses Lake to store and maintain the four flight test aircraft there.

Mitsubishi is still working out the details of its budget cuts and did not disclose the number of employees affected nor whether severance packages will be offered. Dronen said management “will provide this information directly to employees in the coming weeks.”

The program had at one point supported about 400 jobs flight testing the initial M90 model in Moses Lake, along with 200 jobs in Seattle at Mitsubishi’s U.S. partner AeroTEC, which provided testing, engineering and certification support.

“We have had to make difficult decisions that will significantly reduce our global activities and will have a major impact on our organization,” Dronen said.

The news comes after the Japanese industrial giant announced last week an overall loss of $275 million for the fiscal year ending in March. Management deemed that not acceptable as it faces the pandemic-driven downturn affecting all of Mitsubishi’s aviation operations, including its supply of major parts for Boeing jets.

Last week’s financial results showed the SpaceJet bleeding cash, with development costs of $1.3 billion in the last fiscal year.

The aircraft was launched as the Mitsubishi Regional Jet in 2008 with a sleek new design and a roomy passenger cabin. The goal was to enter service five years later. After setbacks, it began flight tests in 2015 in Japan, then in 2016 moved the flight testing to Moses Lake in eastern Washington.

Mitsubishi last year rebranded the plane as the SpaceJet and revamped the concept, but has continued to face setbacks.

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13 Comments
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The beginning of the end? What is the path forward after this?

3 ( +5 / -2 )

The once build can go straight into aeronautic museums. This plane is outdated before it got certified and the market for it has also collapsed. 

Close it down as soon as possible to stop bleeding money.

It was a good and brave idea but the 13 years of delays and the recent developments have made it obsolete. 

Nice try.

0 ( +5 / -5 )

robert maes:

The once build can go straight into aeronautic museums. This plane is outdated before it got certified and the market for it has also collapsed. 

Close it down as soon as possible to stop bleeding money.

It was a good and brave idea but the 13 years of delays and the recent developments have made it obsolete. 

Not really.

Honda started their HondaJet project in 1997. The first flight test was in 2003. But they had to work and wait till 2015 before they received a FAA type certificate. It took 18 years just to get a type certificate.

It's not easy to receive a type certificate from notorious FAA for a new aircraft company. Mitsubishi underestimated how difficult the process of obtaining a type certificate in US is. They should have expected at least 10 years just to get the first type certificate before trying to get orders from possible customers.

Mitsubishi does not have to make money with their first jet. What's important is to get a type certificate. Once they receive the first type certificate, it is going to be much easier to get it for the second aircraft and thereafter. Forget about selling, cut the cost and focus on getting the type certificate and developing a new design for the second and third aircraft. What they need is a patience in dealing with FAA with a long term plan.

4 ( +8 / -4 )

A wasted investment. Close it down.

-1 ( +4 / -5 )

That is where Japan Inc fails. Every time there is a temporary or even longer term set back: close abroad and concentrate it back to bureaucratic Japan. The perfect failure strategy.

3 ( +6 / -3 )

This program needed to close a long time ago. It was plagued with safety issues and bad management from the start.

3 ( +4 / -1 )

Comac C919 will be flying soon.

2 ( +3 / -1 )

@socrateos

Mitsubishi does not have to make money with their first jet. 

Based on reading of Japanese articles, Mitsubishi insider's thinking is that it's cheaper to cut losses and walk away from MRJ now than to actually produce 160 jets on order and support them for 20 years, because on a fleet of 160 jets Mitsubishi cannot make money supporting them.

Forget about selling, cut the cost

It is all about the cost. Mitsubishi of 2020, like most other Japanese Keiretsu, cannot afford to keep losing money for a decade or two before turning a profit, all divisions must be profitable or they get cut.

Times have changed, but Japan Inc has not caught up to different times.

@B. Jay

A wasted investment. Close it down.

And same company is begging to take the leadership of Japan's F-2 replacement fighter jet, currently valued at $40 billion on low-ball optimistic estimate.

@James Stowe

Comac C919 will be flying soon.

The C919 is already flying, and this one will be finished and some 1,000 jets delivered to China's domestic airliners because COMAC isn't seeking US FAA certification.

-2 ( +2 / -4 )

 Every time there is a temporary or even longer term set back: close abroad.

And there's not a lot of strategy in those ham-fisted decisions. They're merely based on the idea that japanese people can't ever be laid off, while foreign workers serve as a firm's cushion or fodder. Meanwhile, watch your overseas competitive position erode from bad to worse to gone. Then, ask for a govt bailout!

4 ( +4 / -0 )

The Aircraft venture was a waste of money. China, with much stronger industrial capacity and capability, still struggles to make one into the sky. Japan does not stand a chance.

-1 ( +0 / -1 )

Cant really say I feel pity for any Japanese company that loses in the US market. They block and obfuscate here; actually I hope more leave the US and more US companies become more innovative and make great products like they once did. Not a fan of anything Japan anymore, sorry.

2 ( +2 / -0 )

Let me clarify that I refer to bad management by Western management. They were too young and inexperienced, not too mention too loose with the truth and safety issues, to be given the reigns of a multi-billion dollar project.

1 ( +1 / -0 )

I see twitter. Many Japanese disappointed. But more Japanese still belive in SPACEJET!!!!

1 ( +1 / -0 )

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