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Ghosn (and English) driving reforms at Mitsubishi Motors

Shareholders approve management shakeup -- and newfound clarity

Ghosn, on screen, speaks at Mitsubishi Motors extraordinary shareholders meeting in Tokyo on Dec. 14.

TOKYO -- Mitsubishi Motors is taking another crack at reform, this time under the wing of Nissan Motor, which is working to change a culture that led to a damaging fuel-efficiency scandal.

The Japanese automaker on Wednesday welcomed new board members, including Nissan President Carlos Ghosn, as shareholders of the scandal-hit company approved the reorganized management structure during an extraordinary meeting. 

Ghosn takes the reins of a company that has foundered despite two major cash infusions since the turn of the century: first by Germany's DaimlerChrysler in 2000, then by other Mitsubishi group companies in 2005.

"I will turn the company to profitability and get it on track for sustainable growth," Ghosn said in Japanese after the meeting. "I am confident in leading the expanded alliance toward success."

The value of brevity

Mitsubishi Motors switched to English in November for all meetings involving executive officers and other senior officials. Trevor Mann, who on Nov. 1 took over as chief operating officer, called on management to work with him to reform the automaker.

"Mr. Mann has reform experience that drastically improved Nissan's performance," MMC President Osamu Masuko said. "And having him to execute our management strategy is very encouraging."

Mann is a Nissan veteran on the production side. He joined the company via a British subsidiary in 1985 and went on to manage Nissan operations across six countries. He is known to be trusted by Ghosn. As COO, Mann holds responsibility for laying out Mitsubishi Motors' next medium-term business plan.

The language change was intended partly to facilitate communication with Mann and Ghosn, but the rationale goes deeper.

In Japanese, some officials went on meandering tangents unrelated to the meat of their reports. Materials or proposals prepared for meetings could go on for 20 pages. A senior official recalled that executives sometimes just read each other's expressions during meetings under the old system -- a sign of slow decision-making and a lack of clarity on where responsibility lies.

The switch to English has forced nervous Japanese executives with a shaky command of the language to make their points more clearly and concisely. Meeting handouts have shrunk to five pages or so. Management is getting the sense that "we can quickly implement the reforms we wanted to do," an official said.

Room for improvement

Representatives from Nissan and Mitsubishi Motors met at the smaller automaker's Mizushima plant on the evening of Nov. 28, before production resumed for the night shift for the first time in some seven months. A Nissan representative noted areas for improvement on assembly lines and elsewhere.

"We've gotten advice from Nissan," said a determined Takayuki Sue, the plant's general manager. "We'll work hard to build in quality."

After starting joint minicar development with Nissan, Mitsubishi Motors introduced onsite parts production for the first time at the Mizushima plant, having suppliers make components directly on the premises. This model reduces transportation and storage costs for automakers while shortening production time.

On the research and development side, Mitsuhiko Yamashita, a former Nissan R&D executive, became Mitsubishi Motors' executive vice president for development and quality in June. Yamashita visits an R&D center in Okazaki, Aichi Prefecture, nearly every week to hear what employees have to say.

Slow but steady

Promoting better internal communication is one of the steps Mitsubishi Motors told Japan's Ministry of Land, Infrastructure, Transport and Tourism it would take to prevent further scandals. The automaker submitted a list of 23 measures to the ministry in June and another eight in September.

Mitsubishi Motors is educating employees more thoroughly on issues such as compliance and giving the execution of these changes more weight in personnel evaluations. The company also is introducing a system requiring executives, including an executive vice president, to check product information before it is submitted to the government.

Seven of the 31 proposals have been implemented so far, including stipulating new requirements for fuel-efficiency reports and mandating sharing of reports on testing. The rest are to be implemented by spring.

"Various problems have been highlighted, but we'll solve them one by one," said Masuko, who will hand over the chairman post to Ghosn on Wednesday.

Nikkei staff writer Tsubasa Suruga contributed to this story.

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