Mitsubishi to sell Dutch vehicle plant for 1 euro

(TOKYO) - Japan's Mitsubishi Motors said Wednesday that it would sell its sole European plant to a Dutch industrial group for one euro in a deal that calls on the buyer to keep 1,500 jobs at the facility.

The announcement comes as new buyer VDL Groep confirmed they were in talks with German auto giant BMW to produce Minis at the southern Dutch factory.

Mitsubishi had earlier this year announced plans to end production at the factory by the end of the year, blaming a difficult operating environment in the debt-hit continent.

In a statement Wednesday, the Japanese firm said it would sell Netherlands Car BV, or NedCar, to VDL Groep, which makes buses and a range of industrial products, for a token one euro ($1.20) in exchange for keeping the plant running.

"(Mitsubishi) had carried out discussions with the related parties to explore the possibility of the future continuation of NedCar while making it a top priority to assure the employment of its employees," it said.

"As a result, (Mitsubishi) has reached a principal agreement with VDL on the share transfer," it added.

Mitsubishi said it expected to book a 28 billion yen ($353 million) loss on the plant to be included in its current fiscal year earnings through March 2013.

"We wanted to avoid a situation where the workers would lose their jobs after we cease production," a Mitsubishi spokesman told AFP.

Mitsubishi announced in February it was planning to halt production at the plant in Born by the end of this year.

Soon afterwards, workers staged a one-day strike at the plant, located about 180 kilometres (110 miles) southeast of Amsterdam, with labour unions demanding that Mitsubishi work with the Dutch government to find a buyer.

Meanwhile in the Netherlands, VDL spokeswoman Carolien van der Leegte told AFP on Wednesday the group was finalising agreements with both BMW and trade unions representing workers.

"We have put forward the intention to produce Minis at NedCar," Van der Leegte said, adding "we hope that BMW becomes our first client. We want to manufacture cars for them."

She said inking the deal could still take several weeks or longer.

Van der Leegte confirmed there would be no job cuts at the plant and that workers would remain on pay roll as the factory is converted to other types of cars. Conversion could take up to two years, she said.

Mitsubishi's president has said he was willing to sell the plant for one euro if the new owner could guarantee workers would remain employed.

The Japanese carmaker produces the Colt subcompact and the Outlander sports utility models at the unit, which used to be a joint venture with Sweden's Volvo.

Output at NedCar, which was established in 1991, has remained sharply below its annual production capacity of 200,000 units, contributing to Mitsubishi's operating loss in Europe.

Production was 40,739 units in 2011, according to the Japanese automaker.