Mitsubishi 2004 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2004 Mitsubishi annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 74

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74

REVITALIZATION COMMITTEE
Mitsubishi Motors created the Revitalization Committee under the direct control of the CEO in order to assemble
intellectual capital within the Company and brainstorm revitalization ideas. We asked Mr. Ando from Phoenix
Capital, now our principal stockholder, to chair the committee. The Revitalization Committee interviews employees
in each department of the Company, creates cross-functional teams (CFTs) for each management issue identified and
then reports to me on major initiatives that cross organizational barriers. More than 70 young employees have been
chosen among applicants to participate in revitalization projects, and I expect them to propose some creative ideas for
revitalization.
EARNINGS TARGETS
Under the Business Revitalization Plan, we aim to achieve profitability on the ordinary profit level by fiscal 2005
and on the net income level by fiscal 2006. Reforms to the earnings structure are the first step we are taking toward
these goals.
Our primary initiatives under way during the current fiscal year focus on reducing fixed and variable costs as well
as restructuring unprofitable businesses. We expect fixed cost reductions will continue to have an effect from the next
fiscal year onward, and plans call for restoring growth by implementing product strategies and geographic strategies that
should have an effect from the next fiscal year.
We plan to lower fixed costs by reducing and optimizing production capacity 17% and shed 30% of our indirect
labor, by fiscal 2006. In addition, we aim to lower material costs, which claim a majority of variable expenses, by 15%
and reduce the number of platforms from the current 15 to 6 by fiscal 2010.
For numerical targets, we are setting our sights on consolidated net sales of ¥2,490 billion, operating profit of
¥120 billion, ordinary profit of ¥100 billion and net income of ¥70 billion by fiscal 2006.
MANUFACTURING AND PRODUCT STRATEGIES
Manufacturing and product strategies are another means for achieving the earnings targets I mentioned earlier.
In manufacturing, our foremost priority is optimizing production capacity. In Japan, we will turn the Okazaki
Plant into a pilot plant and concentrate mass production at the Mizushima Plant and Pajero Manufacturing Co., Ltd.,
(PMC). Overseas, we are adjusting production to profitable levels instead of blindly pursuing higher sales volume.
In our product strategy, we will aggressively introduce new cars that exemplify Mitsubishi Motors DNA with a
solid and smooth ride based on proven technologies as found in the Pajero and Lancer Evolution series.
Mitsubishi Motors is introducing a product executive (PX) system where product executives in charge of a car
model are responsible for ensuring integrated management from basic product concepts and styling to development,
ongoing improvements and post-market quality reviews. Through these measures, we are making every effort to regain
customer trust while strengthening our product features and market competitiveness.
This sums up the management policies and measures that are putting Mitsubishi Motors firmly on the path to
revitalization. I ask for your understanding and support.
YOICHIRO OKAZAKI
Chairman and CEO
5