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[10] MITSUBISHI MOTORS CORPORATION Annual Report 2001
A4.[E] We have formulated the Turnaround Plan. This plan is about changing
processes. In terms of production, we are reducing technical overcapacity while also
planning to restore production volumes over time with the products and the ideas we
now have in the pipeline. We aim to rebuild the MMC brand by positioning it as a
premium brand. Discounts are not the answer.
The Turnaround is based on a process that is backed up by a specially introduced
database that enables us to evaluate all the possibilities. And having thought every-
thing out, we are now explaining this plan to all our people to gain their support. We
are committed to breaking even on a consolidated basis in fiscal 2001. Over the past
few months we have replaced 60% of our executive management. We have closed one
plant and will shut down a part of another plant to rightsize our capacity. We have
addressed the problems and we have communicated the Turnaround Plan to all our
staff, in detail. We have a plan and a system in place to achieve our goals. All the MMC
people realize what the problem is and their role in solving it.
We plan to work with our suppliers, undertaking a review of material costs based
on a value analysis, and we will encourage them under a new type of partnership to
present ideas that can be incorporated into new designs. Global sourcing, which MMC
did not do in the past, offers huge potential for cost savings. Finally, we will benefit
from the DC alliance in areas like purchasing and development.
Our core business is the development and marketing of cars, with a value chain that
stretches from parts procurement, through design and development. The value chain
also features a state-of-the-art production system, including final assembly, and an
intelligent sales business, including after-sales services. We will be a service cham-
pion, with the product as only one part of a value chain whose object is to treat the
customer well.
A4.[S] The difference with this plan is that we have made it very explicit that this
is a new process. The communication has been very open, and we have openly laid
out in detail the steps we need to take to make this plan work. If everyone is prepared
to take responsibility for implementing the planned steps according to the plan sched-
ule, and they take those steps, then we will be able to see the progress we are making.
Once people succeed with their individual targets, and once they see that these pro-
cesses are working and that we are on track, I believe they will gain confidence that
will be the source of energy to drive our company to realize the plan. In other words,
through a combination of our employees taking individual responsibility, and through
an integrated system that builds in cooperation with our suppliers and dealers, I believe
we can show to the financial community that MMC is moving along the trajectory of
this plan back into profit.