Mitsubishi Motors Selects New President

TOKYO April 29, 2004; Yuri Kageyama writing for the AP reported that Japanese automaker Mitsubishi Motors Corp. has picked an executive from the Mitsubishi conglomerate as president and chief executive to replace Rolf Eckrodt, who had been sent by partner DaimlerChrysler AG.

The appointment of Yoichiro Okazaki, now a director at Mitsubishi Heavy Industries, is subject to shareholders' approval at a meeting Friday, the automaker said in a statement.

Eckrodt stepped down Monday as chief executive and president. He said his departure was related to DaimlerChrysler's decision not to offer further financial support to Mitsubishi Motors.

Although Eckrodt's resignation had been expected, speculation had been for him to leave in June to make way for a revival strategy with fresh funding from DaimlerChrysler. Eckrodt had been chosen by DaimlerChrysler in 2001 to head Mitsubishi Motors.

Okazaki, 61, has little experience in the auto industry. He was nominated chairman in February to head the team that will develop a new turnaround plan. He was also nominated as president and chief executive by the board of directors Thursday, the company said.

DaimlerChrysler made a surprise announcement last week that it had decided against pumping more money into Mitsubishi Motors, dashing hopes that Friday's shareholders meeting will be a place to unveil a massive bailout plan.

But the Mitsubishi group companies have said they will stand behind the automaker's revival. Mitsubishi Heavy Industries owns 15 percent of the automaker, trading company Mitsubishi Corp. a 5 percent stake, and Bank of Tokyo-Mitsubishi 3 percent.

Mitsubishi Motors is saddled with 1.14 trillion yen ($10 billion) in debt, plunging car sales both in Japan and North America and a badly tarnished image over a defect scandal that was followed by a spate of recalls.

DaimlerChrysler has not said what it will do with its 37 percent stake in Mitsubishi Motors, but has said the two automakers' joint projects in Chrysler, Smart and other passenger cars will continue.

Mitsubishi Motors' image never recovered after it acknowledged four years ago that it had systematically hidden auto defects for decades and announced a massive recall.

It embarked on a revival plan under Eckrodt and returned to profitability in fiscal 2002, but the following year suffered massive losses from buyers in North America with bad credit.

Mitsubishi Motors is forecasting a 72 billion yen ($661 million) loss for the fiscal year ended March 31, a reversal from 37 billion yen in profit the previous year. Its debts total 1.14 trillion yen ($10 billion).