Mitsubishi 2000 Annual Report Download - page 13

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MMC will reduce costs in non-consolidated operations
by ¥150 b in 4 years by: restructuring its secondary produc-
tion organization and utilizing outsourcing more; reducing
material costs; strengthening management at domestic sales
companies; establishing an independent bus enterprise; beef-
ing up organizational strength in core overseas markets; and
moving into used-vehicle, maintenance leasing and other
high value-added operations.
To maintain its market-leader status and retain customer
loyalty in Japan, MMC will stay ahead of the competition in
development of environmental and other technologies and in
its investment in information technology.
MMC will also be seeking to cash in on its collaboration
with AB Volvo by: developing and supplying a next-genera-
tion medium truck cab and engine; conducting joint research
into crashworthiness, engine emissions and other future tech-
nologies; expanding sales of made-in-Europe Canter trucks;
generating sales collaboration benefits in South America and
New Zealand; and global sourcing.
■Financial health
MMC is working to improve its corporate financial health to
meet the global accounting and managerial standards that are
to be introduced in Japan in the near future. Preparations to
meet accounting standards will be completed during fiscal
2000.
Looking to the future, in fiscal 2000 MMC will take a
one-time charge of ¥140 billion to dispose of postretirement
benefit and other liabilities. This step will benefit the compa-
ny's income position significantly in future years. In fiscal
2001, MMC expects to generate sufficient profits to restore
dividend payments. By fiscal 2003, the final year of Heart-
Beat 21, MMC will reduce interest-bearing liabilities to un-
der ¥1,000 billion and boost consolidated ROE to 8%.
■Corporate organization & personnel
Heart-Beat 21 continues the organizational reforms initiated
under RM2001. The plan calls for a further reduction of
1,000 in total payroll, which was reduced to the 12,000 level
under RM2001. Indirect personnel payroll is to be reduced
by a further 1,000 to 8,900 by April 2004. In Japan, some
head office personnel are to be reallocated on a priority basis
to key car sales companies and other core units. These mea-
sures will bring payroll to a size more appropriate for the
business.
In fiscal 2000, the company will introduce performance-
based remuneration in the form of incentive warrants for of-
ficers and senior management at MMC and its major affili-
ates. Human resources development programs will be up-
graded to match the requirements of globalization; consoli-
dated group management capabilities will be boosted by giv-
ing subsidiaries greater autonomy. Total group staffing will
be reviewed in order to tailor the organization to accommo-
date fast-moving developments in Information Technology,
while far-reaching reforms will be initiated in both internal
and external corporate communications.
Heart-Beat 21
11