Mitsubishi Closes US Design Studio, 60 Employees Out of Work

And the economic downturn continues. Today's recession news concern Mitsubishi and its design studio in the United States, with the Japanese automaker announcing it will close the facility as part of a broader campaign to save costs across the world. The immediate result? The permanent layoff of the 60 employees working at the studio, as MotorAuthority.com informs today.

The US design studio located in Cypress, CA, was until now responsible for the production of several important models in Mitsubishi's product lineup, including the Galant, Eclipse and Endeavor. However, the Japanese manufacturer did not mention whether the decision becomes effective immediately or is scheduled to occur in the next months.

Mitsubishi PR spokesman Moe Durand confirmed the report and explained that all design responsibilities of the American studio will be transferred to the Japanese facilities.

“It’s a reflection of what is going on in the auto industry right now and the economy as a whole. Design functions will now revert fully to our headquarter’s facilities in Japan," he was quoted as saying to The New York Times.

This isn't the first cost measure applied by Mitsubishi as the company last month announced it won't participate at several auto shows in the future, including the 2009 Frankfurt Auto Show, citing "extraordinary business and financial challenges" as the reason. In addition, the Japanese automaker said in early February it won't start production at the newly-built Kaluga, Russia plant due to lowered demand on major markets.

"Mitsubishi is talking about a maximum five-month delay for the start of production of its SUVs," a PSA spokesman said in February (the plant is 70 percent owned by PSA and 30 percent by Mitsubishi). "It does not change anything for us. We will still produce as planned in Russia,” he added, without mentioning the models that may be produced by the new plant.