Mitsubishi Motors Corp (7211.T) said on Friday it will stop building cars at a factory in Normal, Illinois, and seek a “strategic buyer” for the plant.
Normal Mayor Chris Koos on Friday said the plant is scheduled to close later this year and that Mitsubishi would work with the local community to find a new owner.
The company, one of Japan’s smallest automakers, has faced a long decline in U.S. demand and an expiring union contract at the plant, its only assembly facility in the United States.
In a statement, Mitsubishi said its board will seek a buyer to keep the factory running and preserve jobs.
The 900 hourly workers at the plant are the only ones at a Japanese-owned U.S. auto factory to be represented by the United Auto Workers union.
Mitsubishi said it will continue to sell vehicles in the United States. Last year, its U.S. sales totaled 77,643.
The automaker said it had informed Normal employees of the decision, which it said has not been formally ratified by its board of directors in Japan.
In Detroit, a UAW representative declined to comment. An officer of UAW Local 2488 in Normal on Thursday said the union’s contract at the plant expires in August.
The Normal plant, about 140 miles (220 km) southwest of Chicago, opened in 1988 as a joint venture of Mitsubishi and its then-partner, Chrysler. Mitsubishi took sole control of the plant in 1991.
At its peak in the early 2000s, the Normal plant built more than 200,000 cars a year. Last year, production of the Outlander Sport utility vehicle totaled 69,178, according to Mitsubishi.
In Springfield, Jim Schultz, director of the Illinois Department of Commerce, said in a statement, “We desperately need to improve the business climate here in Illinois. We need to retain companies and jobs, not lose them.”
Ford Motor Co (F.N) and Fiat Chrysler Automobiles (FCHA.MI) operate the other two auto assembly plants in Illinois.