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May 4, 2004
In yesterday's Australian Financial Review (subscription required) Brendon Pearson reports on the Mitsubishi crisis. He says that the only remaining hope for the Mitsubishi Motor Corporation (MMC) is the rescue package being put together from the Mitsubishi group. The promised bailout will probably be too small, the company has no surplus assets to sell off, and the DaimlerChrysler stake will be diluted.
That does no augur well for a medium to long-term turnaround for the car maker saddled with high debt, low sales and losses. A cash crunch means cuts to its global operations. Even with the extra money a turnaround will take a long time. What is likely to happen is financial support for MMC is provided until another strategic buyer could be found.
A Chinese buyer?
All this is in such marked contrast to Nissan, Nissan Motor which was near-bankruptcy, revived and is now making record profits. MMC, by contrast, had slumped further over the past two years. It appears that the management lacks a sense of crisis. It has failed to improve its management despite a near decade of continual trouble. The corporation's tendency of covering up problems apparently has not changed.It's corporate culture is overly bureaucratic with a stiff organizational atmosphere, outmoded business practices and a lack of concern for consumers. It's management structure needs reform.
The crisis-hit Mitsubishi is not a big player in Australia since it's volumes of sales keep declining. It appears to be a similar story in Canada. Something on the Chrysler side of the operation. It's not doing that well either.
Nihon Keizai Shimbum, Japan's leading newspaper reported that Yoichiro Okazaki, the new CEO of MMC Yoichiro Okazaki is thinking of scrapping Daimler's original restructuring plan. Okazaki is proposing to a turnaround: to continue with the Japanese production of Pajero SUV since it represents Mitsubishi Motors "identity"; put on hold its original plan to shut down its Australian operations, and instead of withdrawing from the North American markets, "rebuild" it to make it as important as its Japanese market.
Where's the money coming from to do that? Would not that require a change in the corporate culture?
Here is a Mitsubishi sucks website
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A chinese buyer sounds attractive - even if they took up selected plants from a defuct Mitsubishi. The chinese would like the Adelaide plant as a technology transfer iniative - they would be able to use the plant to produce quality cars for export while absorbing the high quality design and manufacturing techniques for chinese operations.