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Mitsubishi Mulls Executive Changes

March 26, 2002

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TOKYO (AP) _ Mitsubishi Motors Corp. president Takashi Sonobe said Tuesday he will propose top management changes to speed up a turnaround at the ailing automaker, setting off speculation he may step down.

Tokyo-based Mitsubishi, which is 37.3 percent owned by DaimlerChrysler AG of Germany, has been trying to boost its plunging sales in Japan and fix its battered image following a defect cover-up that surfaced in the summer of 2000.

In that scandal, the automaker said it had been systematically hiding auto defects targeted in customer complaints for more than two decades in an effort to avoid costly recalls and protect its image.

Sonobe took over as Mitsubishi Motors president in November 2000 after his predecessor resigned to take responsibility for the scandal. He repeatedly promised to win back customer trust.

Sonobe said Tuesday in a statement he will propose ``top management change for acceleration of the turnaround progress″ at board meeting Wednesday.

The announcement set off speculation he will likely step down and hand over his post to chief operating officer Rolf Eckrodt.

The company refused further comment. Eckrodt was sent in by DaimlerChrysler last year to help Mitsubishi’s recovery and has been running the company with Sonobe.

If Eckrodt takes the helm, Mitsubishi will be the third major Japanese carmaker to be headed by a foreigner after Mazda Motor Corp. _ controlled by U.S. automaker Ford Motor Co. since 1996 _ and Nissan Motor Co., which entered an alliance with Renault SA of France in 1999.

Foreign leadership has helped put both automakers on a recovery track, although problems remain for both companies.

Mitsubishi promised to strengthen quality control, but it has been plagued by recalls. On Tuesday, it announced its latest recall of 344,806 Fuso Canter and Fighter Mignon trucks and Rosa buses manufactured from 1994 to 2001, whose motor may overheat and catch fire because of a faulty starter switch that gets stuck.

There have been no reported injuries related to the problem, but 18 problems, including eight fires, have been reported, the automaker said.

About 88,000 Canter trucks were exported, including 16,000 to North America. About 6,000 Fighter Mignon trucks and 3,000 Rosa buses were exported, but the company did not have a breakdown by region.

The automaker will deal with the problems according to the regulations of each country, Mitsubishi Motors spokesman Ran Koike said.

Customer trust in the once mighty Mitsubishi Motors brand has been so shaken here that sales dropped by double-digits after the scandal and have not picked up today. Mitsubishi’s vehicle sales in Japan for February slid 8.9 percent to 40,869 vehicles, compared to the same month a year ago.

After posting huge losses for restructuring and recall costs for the fiscal year ending in March 2001, Mitsubishi Motors had forecast it will break even for the fiscal year ending this month.

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