Mitsubishi Motors Boss: Waiting For Board Employment Decision

TOKYO February 19, 2004; Yuri Kageyama writing for AP reported that Mitsubishi Motors Corp. Chief Executive Rolf Eckrodt acknowledged responsibility for the deepening losses at the Japanese automaker Thursday, but said shareholders will decide whether he keeps his job.

Eckrodt was sent in three years ago to turn the company around by DaimlerChrysler AG of Germany, which owns 37 percent of Mitsubishi Motors after the two joined forces in 2000.

Speculation has surfaced recently that Eckrodt may step down, since the Japanese automaker has fallen back into the red following a return to profitability during its alliance with DaimlerChrysler.

Mitsubishi Motors revised its outlook on Thursday to a 72 billion yen (US$675 million) loss for the fiscal year ending March 31 -- far worse than the 11 billion yen (US$103 million) loss it forecast in November.

"Of course I feel responsible. I would be stupid not to," Eckrodt told reporters at the Tokyo headquarters, fielding repeated questions about his possible resignation.

The outlook for Mitsubishi Motors' sales was also downgraded to 2.47 trillion yen (US$23 billion), from the initial forecast of 2.6 trillion yen (US$24 billion).

Eckrodt hinted a resignation could be in the works, saying two years was "a normal term" for a Japanese company president. But he said he was focusing on fixing mistakes, rather than worrying about his personal fate.

He said it's up to shareholders to decide if he'll continue to lead the beleaguered company.

"It's obviously not my decision," he said. "I don't lose my motivation to help Mitsubishi Motors to be better in the future. And that's what's driving me."

The company is forming a business plan with a new management team. The plan will be announced April 30, when a special shareholders meeting is scheduled, Eckrodt said.

Mitsubishi Motors nominated as chairman Yoichiro Okazaki, now managing director at Mitsubishi Heavy Industries, a machinery maker in the automaker's group. The chairman's job was kept open after Takashi Sonobe died last year.

Japan's fourth biggest automaker has never fully recovered from an embarrassing defect cover-up scandal followed by massive recalls in 2000 that sent sales nose-diving in Japan. Under a partnership with DaimlerChrysler, Mitsubishi Motors reversed years of losses and reported a profit of 37 billion yen in fiscal 2002 -- largely on the back of U.S. economic growth.

The latest downslide originated from its North American business, where losses from car buyers with bad credit hammered profitability, forcing a special loss of more than 40 billion yen (US$375 million).

Without that loss, the business would have done better than the previous year with sales rising in Japan, Europe and the rest of Asia, Eckrodt said. The company lowered its vehicles sales outlook in North America for fiscal 2003 by 45,000 to 275,000 vehicles -- the third time it has downgraded that forecast.

"We make a mistake, and for a mistake, of course, you take consequences," Eckrodt said.