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New Nissan Chief: Nuts and Bolts Man Takes on Trade Issues

March 27, 1992

TOKYO (AP) _ Yoshifumi Tsuji, named Friday as the new president of Nissan Motor Co., said he faces a difficult agenda - solving his company’s internal problems while trying to reduce trade friction with the United States.

Nissan said Tsuji, a 64-year-old former production engineer, would take over in June from Yutaka Kume, who becomes chairman, replacing the retiring Takashi Ishihara.

Kume, 70, who also rose from the production side, helped rejuvenate Nissan’s product line during his seven-year tenure. But he leaves at a time when the No. 2 auto maker could face its first operating loss since 1987 in the second half of fiscal 1992.

Tsuji, like Kume a graduate of elite Tokyo University’s engineering department, ″is an important choice for the next steps at Nissan,″ said Steve Usher, an auto analyst for Kleinwort Benson Securities in Tokyo.

″It’s important for the company to rein in production costs. He’s one of the best people for that job,″ he said.

Nissan is considered one of the least efficient of Japan’s auto makers in terms of labor costs; currently Nissan’s costs are the highest of Japan’s ″Big Five″ car companies as a percentage of sales, he said.

Adding to Tsuji’s headaches are a recession that has dampened demand both in Japan and overseas, and trade pressures to cut working hours and overseas exports, and to hold steady in market share in the United States, the auto makers’ largest foreign market.

In times past, Japan’s top auto makers often exported their way out of a downturn; today, because of frictions with Washington and Detroit and weak overseas demand, that may not be an option.

In part because of this, Japanese auto makers are raising prices and lengthening model cycles. Nissan has already announced it will extend the time between new models for its main lines from four to five years.

″Most people feel this is a structural turning point in the auto industry,″ Tsuji told a news conference.

At the same time, the company is in the middle of paying for its aggressive expansion into the United States and Europe beginning in the 1980s, when it built local production plants.

″Despite efforts to cut back on capital spending in a bad environment, the company is still committed to a fairly high level of spending,″ said Andrew Blair-Smith, an analyst with UBS Phillips and Drew.

Tsuji and Kume, sitting next to each other at the news conference, reflected some of the strains on Nissan in their comments.

Wryly, Tsuji said, ″I tend to be pessimistic, then I gradually become optimistic. So I need some time before becoming my normal self.″

Kume responded, ″I don’t think we have time to warm up slowly.″

Despite the troubles he leaves Tsuji with in moving to the largely ceremonial post of chairman, Kume is credited with turning Nissan’s product line around with such hit models as the Cima and Sylvia cars.

″He put Nissan into the forefront of car design,″ said Ben Moyer, an analyst for Merrill Lynch Research here.