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Saturday, Nov. 4, 2000

MMC's new chief on quest to restore confidence, quality

Staff writer

Mitsubishi Motors Corp.'s new president says his mission is to rebuild his firm's much-tainted corporate culture in the face of a decades-old coverup of consumer complaints.

"We must recover the trust and reliance that we lost from our users and society," Takashi Sonobe said in an interview Friday. "At the same time, we must also regain the confidence that's been lost from our employees. And we need to do this fast."

Sonobe, 59, assumed the posts of president and chief executive officer on Wednesday.

He had been serving as vice president in charge of overseas operations before Katsuhiko Kawasoe stepped down to take the blame for the coverup scandal.

Since the scandal broke in July, MMC has suffered substantial setbacks. Its domestic car sales in September declined 16.4 percent from a year earlier to 26,237 vehicles, and October sales saw a 27.7 percent decrease from the previous year to 15,443.

For the current fiscal year through the end of March, MMC had projected worldwide car sales of 2 million vehicles and consolidated ordinary profits of 20 billion yen on sales of 3.5 trillion yen.

Sonobe, however, admitted that the coverup scandal, the subsequent mass recall and the decline in domestic car sales will affect such projections.

Sonobe's efforts to carry out change after his appointment included setting up the "Corporate Change Team" -- a series of in-house task forces on various issues, including quality control, development, production, sales, and profitability -- which will outline comprehensive reform ideas for introduction in April.

The team will help upgrade the existing restructuring program, called Heart Beat 21, which covers fiscal 2000 through 2003.

Sonobe's priority is producing better-quality vehicles. To that end, two groups from DaimlerChrysler AG, which holds a 34 percent stake in MMC, have recently started checking MMC's planning and production conditions as well as consumer satisfaction, he said.

Sonobe did not mention the possibility of closing down any of the firm's production lines but stressed the need to thoroughly review the trends of Asian, North American and European markets and reflect on the firm's production activities.

"The most important thing is to have a sufficient number of plants capable of producing the most wanted cars in each market, so we may have to consider how to use the rest," he said.

Sonobe said "anything can happen" in regards to the direction of MMC's alliances with German-American automaker DaimlerChrysler and Swedish automaker AB Volvo, which have been attracting attention recently.

The strategic alliance with DaimlerChrysler has brought four of its executives to MMC's top positions. DaimlerChrysler's Rolf Eckrodt is also bound for the office of chief operating officer after he is officially elected at MMC's extraordinary stockholders' meeting in January.

Under the initial tieup agreement announced in March, DaimlerChrysler was to keep a 34 percent stake in MMC for 10 years. However, the renewed agreement in September that followed the coverup scandal called for retaining the stake for just three years.

Sonobe said that after that time elapses, DaimlerChrysler may go either way.

"It's possible that they will try to increase that amount, but then it's also possible that they will decrease it," he said. "We will talk about it after three years."

Sonobe is to leave for Germany on Sunday to meet with DaimlerChrysler executives but said he will not meet with his Swedish counterparts.

MMC's capital tieup with Volvo in December aimed to boost the truck business for the two. MMC plans to establish a commercial vehicle firm within MMC next July, with MMC holding an 80.1 percent stake and Volvo the remainder.

The Swedish automaker is reportedly considering splitting MMC into two separate firms, one for cars and another to concentrate on commercial vehicles.

Another idea being considered would have MMC set up a holding company with its car division and truck division underneath, respectively tying up with DaimlerChrysler and Volvo, industry sources said.

Sonobe said nothing has been decided with Volvo but added that his firm will take up the most suitable option based on effectiveness and profitability.

"You never know, because anything can happen in a short time. And we've been through it (with DaimlerChrysler)," Sonobe said.

"The most important thing is for us to produce cars of a quality that satisfy customers, and make profits so that we can pass them on to our shareholders."

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The Japan Times

Article 6 of 6 in Business news


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