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Thursday, Dec. 4, 1997

Mitsubishi Motors chief intent on turnaround

Staff writer

A healthy and cheerful president free of worries is just what Mitsubishi Motors Corp. needs since being racked by legal troubles ranging from sexual harassment to "sokaiya" payoffs.

Looking fit and describing himself as a "sleeping machine" because he sleeps well after only one glass of sake, Katsuhiko Kawasoe, 61, is determined to get the firm back on track. "Since such a surprising (payoff) scandal occurred, it must have been a voice from heaven to reform the company," the automaker's new president said in an interview. "I want to change the company in a way that can help it reflect the market and opinions of young people."

Over the past two years, the helm of troubled MMC has too often changed hands. Nobuhisa Tsukahara, who took over in June 1995, stepped down in the spring of 1996 after falling ill. Takemune Kimura, Tsukahara's successor, resigned last week after four of the automaker's executives were jailed for allegedly buying the silence of a sokaiya racketeer at general shareholders' meetings.

Since his inauguration as president last week, the former MMC managing director said he has made a commitment to the public and his employees that the firm will become "open and clean." As to the source of the corporate racketeering scandal, Kawasoe said Japan's corporate culture may be partly to blame.

"For example, American people won't accept a rule unless it is clearly stated, so they explain the rules carefully in detail," Kawasoe said. "Japanese people won't say the rule out loud, assuming that everyone already understands it. But we now feel that we must make it clear even though people may have already understood."

The scandal and Japan's economic slump have caused MMC's sales to deteriorate. In November, sales dropped to 45,158 units, 26.1 percent lower than those of the same period a year earlier. "In past years, we should have sensed that the auto market has been rapidly changing," the president said.

MMC, which led the market trend toward sports-utility and multipurpose vehicles with its Pajero, took its lead for granted and did not work hard to anticipate where the trend would go. All the while, the SUV segment gave birth to several off-shoots, one right after another, Kawasoe said. "Every automaker is searching for a new vehicle that is not a sedan and that will set a new industry trend," he said, adding that the company must urgently discover what functions consumers are expecting in a car and then create within the company a consensus on what strategy to pursue. "Unlike Toyota Motor Corp., which has a huge share in the market and is trying to expand, we must search for a niche product," he said.

Regarding its sales, MMC had wanted to attain a 15 percent share of the domestic market and a 5 percent share of the global pie by 2000. However, the company is now looking farther into the future, realizing that 2000 is an unrealistic target date.

With growing public awareness of the environment and dwindling supplies of fossil fuels, MMC last year introduced its Gasoline Direct Injection engine that the firm says will cut carbon dioxide emissions by 30 percent and improve fuel efficiency by 30 percent. Referring to a hybrid car being produced by Toyota, Kawasoe said he does not think it will be practical since its batteries are not recyclable and the price -- 1.5 million yen more than conventional cars of the same size -- is not realistic.

Kawasoe said the company was hit hard due to the economic turmoil in Thailand. "If we hadn't planned it as an export base, we would have reduced the production plan drastically," he said. But he also maintained a positive view: "Our production for Thailand's domestic market will shrink, but I believe that exports will expand."

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The Japan Times

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