A Mitsubishi Motors Corp. (MMC) move to shift its Tokyo corporate headquarters to Kyoto is likely to be postponed indefinitely, sources said Sunday.

The plan announced in late May would have relocated the firm's headquarters from Shinagawa Ward. MMC operates an engine plant in Kyoto.

The move, to have been completed in fiscal 2006, was part of a broad restructuring program for the carmaker, rocked by continuing reports of defects in large vehicles made by a former division, now split off into a separate company.

However, when MMC executives asked the firm's Tokyo workers if they would move to Kyoto, about 1,000 employees said they would take early retirement, along with accompanying bonuses-meaning the move would have cost the company more than savings from a reduced workforce.

In December, MMC officials are expected to ask Kyoto municipal government officials for an extension to the plan, sources said.

Some sources think the move may never happen.

One sign of this is that the MMC project team working out the move's details has suspended its operations, indicating the company is no longer considering the move.

However, the sources also said the company may pick another site for its headquarters because there is still a strong consensus among higher executives that such a symbolic shedding of past trappings was needed to show the firm's new resolve.

Under the original plan, of the 1,400 or so MMC employees now in Shinagawa, about 100 would have remained in Tokyo to deal with government officials.

About 200 workers in the product planning section would have been relocated to research facilities in Okazaki, Aichi Prefecture. Another 700 would have been moved to the new headquarters in Kyoto.

As envisioned, the plan would have saved MMC about 2 billion yen annually.

In June, former MMC President Yoichiro Okazaki formally told Kyoto municipal and prefectural government officials of the company's relocation plans.

Okazaki has since been promoted to chairman.(IHT/Asahi: November 8,2004)