Mitsubishi Motors chief executive Rolf Eckrodt on Thursday acknowledged responsibility for the deepening losses at the Japanese carmaker, but said shareholders will decide whether he keeps his job, according to an Associated Press (AP) report.
AP noted that Eckrodt was sent in three years ago to turn the company around by DaimlerChrysler, which owns 37% of Mitsubishi Motors, after the two joined forces in 2000 and added that speculation has surfaced recently that he may step down, since the Japanese carmaker has fallen back into the red following a return to profitability during its alliance with DaimlerChrysler.
Mitsubishi Motors revised its outlook on Thursday to a 72 billion yen ($US675 million) loss for the fiscal year ending March 31 – far worse than the 11 billion yen (US$103 million) loss it forecast in November, AP said.
“Of course I feel responsible. I would be stupid not to,” Eckrodt told AP at the Tokyo headquarters, fielding repeated questions about his possible resignation.
According to Associated Press, the outlook for Mitsubishi Motors’ sales was also downgraded to 2.47 trillion yen ($23 billion), from the initial forecast of 2.6 trillion yen ($24 billion).
Eckrodt reportedly hinted a resignation could be in the works, saying two years was “a normal term” for a Japanese company president, but he added he was focusing on fixing mistakes, rather than worrying about his personal fate.
He reportedly said it was up to shareholders to decide if he’ll continue to lead the beleaguered company.
“It’s obviously not my decision,” he told AP. “I don’t lose my motivation to help Mitsubishi Motors to be better in the future. And that’s what’s driving me.”
Eckrodt reportedly said the company is forming a business plan with a new management team and the plan will be announced on April 30, when a special shareholders meeting is scheduled.
AP said Mitsubishi Motors has nominated as chairman Yoichiro Okazaki, now managing director at Mitsubishi Heavy Industries, a machinery maker in the carmaker’s group – the chairman’s job was kept open after Takashi Sonobe died last year.
Associated Press noted that Japan’s fourth biggest carmaker has never fully recovered from an embarrassing defect cover-up scandal followed by massive recalls in 2000 that sent sales nose-diving in Japan.
AP noted that, under a partnership with DaimlerChrysler, Mitsubishi Motors reversed years of losses and reported a profit of 37 billion yen in fiscal 2002 – largely on the back of US economic growth – but the latest downslide originated from its North American business, where losses from car buyers with bad credit hit profitability, forcing a special loss of more than 40 billion yen ($375 million).
Eckrodt reportedly said that, without that loss, the business would have done better than the previous year with sales rising in Japan, Europe and the rest of Asia.
AP said the company lowered its vehicles sales outlook in North America for fiscal 2003 by 45,000 to 275,000 vehicles – the third time it has downgraded that forecast.
“We make a mistake, and for a mistake, of course, you take consequences,” Eckrodt reportedly said.