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Mitsubishi announces fresh cuts

Mitsubishi Motors has announced fresh cost cutting measures amid warnings of poor profit expectations.

Executives' pension rights will be halved, staff salaries cut by 5-10% and some bonuses cancelled, the firm said.

Costs should be reduced by a further 72.6bn yen (£379bn) in response to a sudden sales slide in Japan.

"Today's moves are aimed at avoiding risks that have surfaced since we announced our business revitalization plan on 21 May,” says chief executive Yoichiro Okazaki.

Okazaki was referring to an agreement reached last month, when investors accepted a $4bn (£2.2bn) emergency rescue package for Japan's fourth largest carmaker.

As part of the package, Mitsubishi agreed to cut some 11,000 jobs, or 22% of its global workforce.

Manufacturing plants in Japan and Australia would be closed and US factories would be reorganised.

The deal threw a lifeline to the debt-ridden carmaker, which has faced an uncertain future since its biggest shareholder, DaimlerChrysler, which holds a 37% stake, withdrew financial support last month.

Along with the details of last month's rescue package, Mitsubishi unveiled a net loss of 215bn yen (£1bn) for the year to March, higher than the 72bn yen (£35m) it had forecast in February.

The figure partly reflects a disastrous performance from Mitsubishi's US car finance division, which handed out cheap loans in an effort to boost sales, but then found that many customers were unable to make their repayments.

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