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Thu, Mar 28, 2002 - Page 21 News List

Mitsubishi taps foreigner as CEO

AFP , TOKYO

Rolf Eckrodt, right, grins after he was named chief executive of Mitsubishi, becoming the third foreigner to head up a Japanese automaker.

PHOTO: AFP

Mitsubishi Motors Corp yesterday became the third of Japan's top-five automakers to appoint a foreigner as chief executive but analysts said he would struggle to follow the axe-swinging example set by Nissan's Carlos Ghosn.

Rolf Eckrodt, 59, the German former cost-cutting DaimlerChrysler AG executive is to become president and chief executive of troubled fourth-ranked Japanese carmaker Mitsubishi Motors Corp, the company. This would leave only Toyota and Honda among the top Japanese automakers without a foreign head.

"Mitsubishi Motors is known for its conservative management and we will see how far Eckrodt can change that," said Mamoru Kato, an auto analyst at the Tokai Tokyo Research Center.

"DaimlerChrysler is getting impatient with Mitsubishi because Mitsubishi is not turning into a profitable company since joining the DaimlerChrysler group," Kato said.

Foreign executives are seen as being unburdened by Japanese traditions and able to cut loose weak parts suppliers, sell off assets and return failing automakers to profitability.

"No matter what the result, I think that having a foreigner in charge will result in more drastic changes than if a Japanese was at the head," said Toyo Securities Co Ltd auto analyst Yoshikazu Fukaya.

"But it's easy in the short term to cut costs and raise profits," he said. "The question is whether they can create profits over the long term."

Eckrodt joined Mitsubishi as chief operating officer in January last year, three months after DaimlerChrysler took a leading 34 percent stake in the troubled automaker. The German-US automaker later raised its stake to 37.3 percent.

He joins Brazilian-born Ghosn, who became chief operating officer of Nissan Motor Co Ltd in June 1999 and chief executive in June 2000, after France's Renault SA took a leading stake in the company.

The other member of the foreign triumvirate is American Mark Fields, the third foreigner to head Mazda Motor Corp since US-based Ford Motor Co raised its stake to 33.4 percent in May 1996.

Though Nissan and Mazda expect to post net profits in the year to this March, at 330 billion yen (US$2.5 billion) and 1.3 billion yen respectively, analysts said Eckrodt may face a tougher job in changing Mitsubishi.

"Ghosn's case was the exception to the rule, I think," said Toyo's Fukaya.

"For a foreigner to come in and do everything he wants in a traditional Japanese company doesn't happen very often."

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