Culture repair in effect at Mitsubishi

Fixing the culture at Mitsubishi Motor Corporation is a key priority for the new team of Nissan executives that now run the company.

MMC has been plagued by a series of crises and scandals, including the stashing of years of warranty claims against its vehicles and the falsification of fuel economy data that dates back decades.

But Mitsubishi’s new chief operating officer Trevor Mann, a 31-year Nissan veteran, has told motoring.com.au that he is also confident of the company’s underlying strength and ability to return to health.

A straight-talking Englishman, Mann said Mitsubishi’s processes were the subject of a “soup to nuts” review.

“Mitsubishi isn’t full of bad people, far from it.” Mann told motoring.com.au at the Geneva motor show this week, where Mitsubishi launched the Eclipse Cross SUV.

“They are really nice people, really competent engineers and really want to do a good job.

"Why certain things happened in the past we have had to look at and we have had to make changes.”

It was the fuel economy issue, exposed last year because it affected kei (mini) cars built by Mitsubishi for Nissan in the Japanese market, that led to Nissan’s purchase of 34 per cent of Mitsubishi and its assumption of management control.

As part of that deal Nissan has appointed four representatives to the Mitsubishi board and Renault-Nissan alliance boss Carlos Ghosn has become chairman. Mann is one of several Ghosn appointments to the management team at MMC.

“In terms of the company’s organisation, in terms of the meeting structures, the cross-functionality and the transparency, the business ethics, audit functions and things like that, we are reviewing soup to nuts to make sure we are very robust and compliant company,” Mann said.

An engineer by trade, Mann highlighted “re-engineering” Mitsubishi’s engineering division as a key initiative.

“Re-engineering means that the processes we go through to develop our technology, to develop our platforms, to develop our vehicles; just to make sure everything is robust and clear and obviously follows a compliant path,” he said.

“We are reinforcing our organisation so we have very good governance, very strong business ethics and also very open so that if someone sees something going wrong they are not in fear of raising their hand and saying ‘this isn’t working, let’s please have a look at this’.

“It doesn’t mean to say that we are a bad company, but obviously we can’t hide from the fact that some bad things have happened. But there are lots of reasons for those things and we need to make sure that we address every single one of them.”

Despite its disasters, which led to the takeover, Mann insisted that Mitsubishi was in better shape than Nissan when Ghosn led the formation of the alliance with Renault 17 years ago.

“I think if you look back at Nissan in 1999 it was dead,” Mann said bluntly. “It had a debt mountain of about $USD 19 billion, so Nissan was really, really on its knees. Mitsubishi is not on its knees.

“From a financial point of view it’s not been so bad. We have been static around the one million units plus or minus and making the six per cent operating margin for the last four or five years, which is relatively healthy.

“So we are relatively cash-rich and we don’t have debt, so in that respect it’s not like Nissan.”

However, he was clear about the benefits to Mitsubishi of coming under the wing of the much larger Renault-Nissan alliance.

“We need help because one million units for a company today is not really sustainable. What that means is even if you are relatively healthy in terms of profit margin, the mass amount of dollars you are accumulating doesn’t really allow you to regenerate and invest in the new platforms, the new technologies, the compliance you have got to invest in for safety and environmental.

“It becomes very, very difficult, and obviously the new technology in terms of autonomous driving and this type of thing, it makes it quite difficult for a company of our size.

“So with the alliance it means that we have all of those things accessible through Nissan.”

Mann told motoring.com.au that platform integration with Nissan was the way the Pajero off-roader could be continued, but played down any chance of the veteran Lancer small car continuing into a new generation.

Mann is in Australia next week making his first review of Mitsubishi’s local operations.