Mitsubishi Heavy Industries Ltd. will likely drastically scale back the development of the Mitsubishi Space Jet, Japan's first homegrown jetliner, slashing its workforce amid the coronavirus-driven economic downturn.
MHI's backstep is expected to inflict a further delay on the Space Jet, formerly known as the MRJ, as it deals with effects of the ongoing virus outbreak in Japan.
The company will significantly cut jobs at MHI's development subsidiary, Mitsubishi Aircraft Corp., which is headquartered in Aichi Prefecture. Some of the about 2,000 employees assigned to the development and manufacture of the jetliner at Mitsubishi Aircraft will be reassigned to affiliated companies, according to a source close to MHI.
As part of its plan to cut the workforce by nearly half, Mitsubishi Aircraft also is not expected to renew single-year contracts of highly paid foreign workers, the source said.
Flight tests of the 90-seat aircraft, which have been conducted in Japan and the United States, are currently suspended, though the development is in the final stage.
The firm also plans to delay the schedule for mass production of the aircraft. For the time being, it will likely suspend the development of a 70-seat model -- which is positioned as the firm's mainstay aircraft in the future.
The delivery of the first Space Jet has been postponed six times from the originally scheduled 2013, and pushed back to fiscal 2021 or later.
Mitubishi Aircraft's parent company, MHI, announced May 11 that it posted a huge loss in its consolidated financial results for fiscal 2020, which ended March 31, due partly to delays in development of the Space Jet.
MHI posted its first operating loss in 20 years in its core business. The company has also announced a plan to reduce development costs to about 60 billion yen, about half of the amount from the previous year.
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