MMC president-to-be leaves no stone unturned

by Sayuri Daimon

When he arrived in Tokyo more than a year ago from the Railsystem Unit of the DaimlerChrysler Group, Rolf Eckrodt, vice president and chief operating officer of Mitsubishi Motors Corp., gave each MMC executive a piece of the Berlin Wall encased in clear plastic.

The gifts came with the inscription: “Leave no stone unturned.”

“This is the symbol of our turnaround,” Eckrodt said during an interview with The Japan Times, displaying one of the cases.

Eckrodt took his current position in January, 2001, and on Wednesday it was announced that in June he will become Mitsubishi’s foreign president.

The president-to-be said MMC will achieve its goal, set in its “Turnaround Program,” to break even in the 2001 business year, thanks to cost-cutting efforts and the recent weakening of the yen.

But Japan’s No. 4 automaker still faces mounting tasks ranging from strengthening management to maintaining strict quality control and producing cars that can sell, he said.

Indeed, MMC management has been struggling to improve the troubled automaker’s business performance. Mitsubishi suffered huge losses following a recall coverup scandal in 2000. It launched the turnaround plan in April 2001, which aims to cut jobs and costs and overhaul the management system to improve its financial condition by March 2004.

For Eckrodt, who came from DaimlerChrysler AG, which controls a 37.3 percent stake in the Japanese automaker, the Berlin Wall fragment also carries the meaning of reunification of East and West and bringing two different cultures together.

“We have Western style management, and we have a Japanese decision-making process, (which values the) seniority principle and harmony,” the 59-year-old COO said. “I don’t want to Germanize the company. I don’t want to dominate the company. I just want to have a team spirit to go for all the changes under a common understanding.”

Eckrodt, who holds a degree in mechanical engineering from the University of Bochum in Germany and is known by the nickname Car Meister among his colleagues, has been enjoying the atmosphere of the shop floor. He has had numerous meetings with factory workers and ordinary employees, inviting them to present ideas to improve the company.

As a result, nearly 9,000 ideas have come in from all over the company, he said.

Under the turnaround program, Eckrodt said cost-cutting efforts have been producing satisfactory results, but other issues remain such as quality control, process optimization, review of management concepts and installation of IT systems.

“The whole process had to be renewed to make sure quality is produced,” said Eckrodt, adding that MMC has adopted the quality gate system of DaimlerChrysler, which created additional checks and tests in the product development process.

The final challenge is the new products. Mitsubishi has not had a popular product in recent years, except its latest minicar eK wagon. Since that vehicle’s debut in October, MMC has sold more than 65,000 units. However, minicar models in general generate limited profits.

Since it plans to introduce only six models in the next business year and four in the year after — most being minor updates — prospects of bringing huge profits through new products seem slim.

“It takes time,” Eckrodt said. “If we do it quick and dirty, then we create additional quality problems.”

Meanwhile, Eckrodt singled out the design section, which previously had “no real direction, guideline, no real brand positioning and no real marketing,” as an area that has improved dramatically by defining what Mitsubishi cars are.

“Family identity, spirited car, lifestyle-oriented, and for young people. (Those) are the characteristics of Mitsubishi cars,” said Eckrodt, who drives a luxury Proudia sedan and, on the weekend, a Pajero sports utility vehicle. “This positioning happens in the new products.”

Nearly 30 people from DaimlerChrysler are working for MMC at the moment, and synergistic effects are expected, including technology exchanges and cost slashing by integrating wholesale and procurement systems. In the area of car development, a new compact car based on a joint platform will be released in the domestic market in November.

“We are working together in all segments . . . We are looking for new ideas to create a lot of common parts and components and differentiate cars by design,” he said.

Large and small sedans based on these ideas will be introduced in 2003.

Regarding retail sales channels, Eckrodt said DaimlerChrysler hopes to maintain the exclusive sales channel of Mercedes-Benz, though there are some Mitsubishi dealers that sell DaimlerChrysler cars, such as the smart. “There are chances to team up, but we want to differentiate different brands,” he said.

Commenting on Nissan Motor Co.’s charismatic president Carlos Ghosn, Eckrodt called him a kind of “ice breaker” because he made “Japanese people realize the need for change, and he has shown that it is possible.”

Compared to Ghosn, Eckrodt has so far maintained a low profile in and outside his company, partly because he is the No. 2 guy after MMC President Takashi Sonobe. But he may make himself more visible once he takes the helm.

While noting that Nissan and Mitsubishi are different in size, culture and tradition, he said with regard to Ghosn’s efforts to turn Nissan around: “Our tasks are comparable. In some respect, it helps me that he did it.”