By any reckoning, it has been quite a year for Japanese auto companies, whose results have just landed. Record earnings at Nissan and Toyota, dramatic swings from losses to profits at Mitsubishi Motor and Mazda -- all this comes amid much change in the industry.
The salutary performances turned in by Japan's big-brand car manufacturers also come with some sort of weird celebratory ritual among the gaijin, as we foreigners are known. Somehow, these companies are now supposed to be something other than Japanese.
They're succeeding to the extent that they've begun to follow the lead of imported saviors -- missionaries, really -- who have turned them into foreign islands in a Japanese sea.
I can't buy into this. The influence of foreign executives among Japanese carmakers is unmistakable. They are performing tasks their Japanese counterparts were addressing too slowly or not at all. But the notion that a handful of gaijin is altering the national ethos is sheer hubris. The control in the experiment is simple: Toyota Motor Corp is the largest and most successful automaker in Japan. It's also explicitly committed to upholding the Japanese corporate model.
The star of the show among the car manufacturers, of course, is Carlos Ghosn, the Brazilian-born president and chief executive at Nissan Motor Co, who was brought in to restructure the money-losing giant in 1999. Having watched him succeed swiftly, if not yet completely, we are now invited by the Financial Times to think of him as another Commodore Perry, the American door-opener of the 19th century.
Behind him stand others set to assume the same role, based on partnerships similar to Nissan's with Renault SA. At Mitsubishi Motor Corp, Rolf Eckrodt, who came from DaimlerChrysler AG, has overseen the restructuring and is set to become chief executive later this month. Mark Fields, who came from Ford Motor Co, has headed Mazda Motor Corp for the past three years and has guided that company's return to the land of the living.
Results for the year to March 31 certainly make the gaijin look good. Nissan just reported record operating profits of Japanese yen 490 billion (US$3.8 billion) on sales of Japanese yen 6.2 trillion. Ghosn has achieved an operating margin just short of 8 percent and debts are down drastically. The man from Renault is now negotiating an important joint venture with Dongfeng Motor Corp, its partner in China.
After a year of restructuring, Mitsubishi Motor reported a return to profit, with an operating gain of Japanese yen 40.2 billion, against a loss of Japanese yen 74 billion the year earlier. This came on a marginal drop in sales, to Japanese yen 3.2 trillion. Debt is down, and the cost-cutting drive is being intensified.
Roughly the same story at Mazda, which is one-third owned by Ford. It turned in net profit of Japanese yen 8.8 billion, compared with a net loss of Japanese yen 155 billion the year earlier. For the year just begun, the company says it expects profit to increase by more than double, to Japanese yen 20 billion, on a forecast rise of 8 percent in sales, more debt payback and reduced capital outlays.
Currency swings played no small role in these results.
So did tougher contracts with suppliers, workforce reductions, plant closings, changes in decision-making and management -- the deeper story at all three of these companies.
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