Mitsubishi 1999 Annual Report Download - page 33

Operational review
31
As a vital first step to the successful execution of RM2001,
major reforms of the corporate organization were implement-
ed in June 1998. Additional changes were introduced in June
1999 to simplify the organization further and enable faster
decision making and execution by management, as well as to
more clearly define responsibilities and authority involved in
the implementation of the measures and attainment of tar-
gets, set by RM2001. The principal changes implemented in
June this year are:
•In the first tier of the organization, two of the three
Headquarters have been eliminated to leave just the
Headquarters of Truck & Bus Operations, thereby highlight-
ing its standing as the unit which directs all aspects of truck
and bus operations.
•In the passenger car overseas operations division, "local-
ization" is the key word in the establishment of two new
Offices: Office of North America Car Operations and Office
of Europe Car Operations. More authority has been delegat-
ed to local management in the areas of business operations
and staffing.
•In addition, the company has decided to outsource some
key functions in order to realize further organizational effi-
ciencies. As the first step in this strategy, the head office
Business Information Systems Department was spun off as
an independent company in June.
To reduce fixed costs, RM2001 calls for nonconsolidated in-
direct personnel to be reduced from 13,400 in April 1998 to
12,000 in April 2000. This is well on track, with indirect per-
sonnel down to 12,700 in April 1999 and as a result, indirect
labor costs in fiscal 1998 were down to ¥128 billion, a reduc-
tion of ¥7 billion.
The company started research into the potential problems re-
lated to Y2K in July 1996, and has implemented programs to
identify and remediate potential problems in its products, in-
formation systems, and production and administrative facili-
ties, and at associates and client companies in Japan and
overseas.
The company has already ascertained that none of its
products, either current or older models, will be affected by
Y2K. The company is currently assessing potential problems
in, and taking remedial action where required, its internal in-
formation systems and production facilities. The target date
for completion of modifications is the end of September this
year. The company has formally requested affiliate and client
companies in Japan and overseas to deal pertinently with
Y2K, and stays in regular touch with them to ascertain the
state of progress.
The company estimates nonconsolidated Y2K expendi-
ture at around ¥1.2 billion. Of this total, approximately ¥640
million had been incurred by the end of fiscal 1998, with a
forecast of further spending of ¥550 million required in fu-
ture.
President
Office of Corporate Planning Strategy
[General Administration]
[Quality & Technical Affairs]
Office of Purchasing
Office of Service Parts
Office of Car Product Strategy
Car Product Design Office
Car Reseach & Development Center
[Car Production Control & Engineering]
Nagoya Plant
Kyoto Plant
Mizushima Plant
Office of Domestic Car Operations
Office of International Car Operations
Office of North America Car Operations
Headquarters of Truck & Bus Operations
Truck & Bus Research & Development Center
Tokyo Plant
Office of Truck & Bus Sales
Truck & Bus International Sales
Organizational reforms
Trimming the payroll
Y2K