Mitsubishi Motors names German CEO

TOKYO, March 27 Reuters reported that Mitsubishi Motors Corp said that a German, Rolf Eckrodt, would be its new chief executive -- a move seen as boosting partner DaimlerChrysler's influence at the ailing Japanese automaker.

With Eckrodt's promotion, Mitsubishi becomes the third Japanese automaker to install a foreigner at its helm as the weaker firms seek overseas help amid rapid consolidation in the global auto industry.

As CEO, Eckrodt, who was brought in from DaimlerChrysler AG in 2001 but has so far only been in charge of Mitsubishi's passenger car division, will also oversee the truck and bus operations, suggesting faster restructuring there.

``I will fight with all my experience and strengths for the success of the whole company, including now the truck and bus division,'' Eckrodt, formerly Mitsubishi's chief operating officer, told a news conference.

The 59-year-old's appointment will take effect on June 25 with outgoing President Takashi Sonobe becoming chairman.

The move is widely seen as DaimlerChrysler, which owns 37 percent of Mitsubishi, increasing its control of Japan's fourth-largest automaker, but Sonobe said the decision was his.

``When I realised we would definitely break even this business year, I didn't want the company to sit back and relax. The year starting in April will be a tough one and I wanted to make sure tough steps would be implemented,'' he said.

DaimlerChrysler said in a statement that it did not plan to lift its stake in Mitsubishi or consolidate it.

Some analysts had feared Eckrodt's appointment would mean the German-U.S. group had effective control of Mitsubishi, leading to consolidation and requiring it to put the automaker's hefty 1.3 trillion yen ($9.76 billion) in group debt on its own books.

Analysts agreed there were brighter prospects for faster restructuring at Mitsubishi's truck division -- the strongest part of its operations.

``This will accelerate the restructuring of the truck and bus business and we'll see greater influence from DaimlerChrysler -- more joint purchasing and joint distribution,'' said Jan Wagener, analyst at West LB Securities Pacific.

TRUCK REFORM LAGS

Reform in trucks has so far lagged the passenger car division, partly due to the need to sort out the ownership structure. Swedish truckmaker Volvo AB last year eventually gave up plans to work with Mitsubishi's truck unit and sold its stake in the automaker to DaimlerChrysler.

DaimlerChrysler's CEO Juergen Schrempp is in Tokyo and Japanese media have reported that talks with Mitsubishi executives will focus on trucks.

Both executives, however declined to confirm a Japanese newspaper report that Mitsubishi was planning to turn the truck business into a separate subsidiary that would be 30 percent owned by DaimlerChrysler.

Sonobe said only that the company was studying many options for the unit and would take some months to come to a decision.

Mitsubishi's stock ended up 10.75 percent at 340 yen, compared with a 1.03 percent climb in the benchmark Nikkei average. This follows a 4.42 percent gain on Tuesday when it became clear that a management change was imminent.

There was less agreement among analysts on whether Eckrodt's appointment necessarily meant radical change or faster implementation of change at the automaker's troubled car unit.

Lacking new products and battered by a customer complaints cover-up scandal in July 2000 that resulted in the recall of nearly two million vehicles worldwide, Mitsubishi's sales have slumped in its home market.

Although U.S. sales are holding up, analysts say the Japan outlook remains grim as many gains from restructuring have been reaped and no major product launch is due until late 2002.

``I don't see radical change as we've already had a lot of it and the changes to come relate to systems and processes already in place,'' said Howard Smith, analyst at ING Baring Securities.

``In terms of next year's earnings, the appointment is neither here or there,'' he said.

Others said dramatic change, such as further staff cuts, more cuts in production capacity and a more radical slimming-down of Mitsubishi's wide-ranging product line could come over time.

The other Japanese automakers to have turn to foreign leadership are Nissan Motor Co and Mazda Motor Corp , headed by Brazilian-born Frenchman Carlos Ghosn and American Mark Fields respectively.