A job well done but…

Don’t Drink and Write
Vernon B. Sarne

Last week, Mitsubishi Motors Philippines Corp. (MMPC) formally bade a fond farewell to its outgoing president Yoshiaki Kato, who has now been tasked to assist in the automaker’s Australian operations. The company noted that the Japanese executive became its youngest leader ever when he took the post in 2015 at the age of 49.

Under normal circumstances, youth wouldn’t have been a concern for anyone about to helm the second-biggest player in the market. The job would have been as effortless as running a vehicle in cruise control.

But Mr. Kato joined MMPC at a most crucial point in its history. A wealth of management experience — or a head of gray hair — surely wouldn’t hurt.

For one, MMPC had just purchased Ford Philippines’ 21-hectare manufacturing facility in Santa Rosa, Laguna, and was in the midst of transferring its headquarters there from its previous base in Cainta, Rizal. This process was anything but simple. Apart from the logistical nightmare of moving an entire assembly plant, the company had to deal with some employees who weren’t willing to face the daily horror of urban traffic just to get to work.

And then there was government’s Comprehensive Automotive Resurgence Strategy program, which offered fiscal and non-fiscal incentives to car companies that would manufacture vehicles locally. MMPC promptly added a new body-stamping shop to its just-acquired property, and announced that it would be making its own parts.

The firm then revealed that the Mirage subcompact hatchback (and its Mirage G4 sedan twin) would soon be Philippine-made. This came to fruition in June this year. A sample unit was proudly on display during Mr. Kato’s send-off.

But the most telling indication of Mr. Kato’s able leadership was MMPC’s handling of the dreadful PR crisis brought about by fresh allegations of sudden unintended acceleration leveled against the old Montero Sport in late 2015 (just as the group was preparing to launch the model replacement). It’s not easy uprooting your head office and putting together the necessary components for a car’s local assembly, while also fending off a widely publicized, brand-damaging accusation. Any bungling expatriate CEO would have panicked in the situation. Instead, Kato-san allowed his Filipino lieutenants to navigate the issue, while displaying all the calmness of a monk.

It worked, because MMPC sold a total of 61,400 vehicles in 2016 — its best-ever one-year sales tally.

These days, you won’t miss the Philippine-made Mirage because Mitsubishi won’t let you. I’ve seen ads trumpeting the accomplishment inside movie theaters. Without a doubt, the nationalism embedded in the message — and the fact that the milestone also means more jobs for Filipinos — is a nice way to counteract all the bad press Mitsubishi has received the past couple of years. Presenting a symbolic Mirage to President Duterte back in February likewise helped in stemming the tide of negative publicity.

Somebody observed that Mr. Kato had achieved in two years and four months what other executives couldn’t in a full four-year term. And he seemed well-loved among MMPC employees as well as by the dealership network, judging by the tribute video shown to party guests. So why such a short stint? Why is he being replaced just as everything seems to be going fine for Mitsubishi in our market?

A company executive revealed to me the real score.

“Mr. Kato is a good leader,” my source said. “He did a lot of things, and everyone loved him. But now we need a stronger leader. Someone who can deliver what MMPC wants from Japan.”

That someone is Mutsuhiro Oshikiri, who joined Mitsubishi Motors Corp. in 1980 and most recently served as CEO of Mitsubishi Motors Australia (MMAL). So technically it’s a trade between MMPC and MMAL. Which subsidiary will benefit more from this executive swap remains to be seen.

So what does MMPC want from Japan?

According to my source, MMPC is lobbying its mother company for a rebadged version of a Nissan van (quite possibly the NV350 Urvan) for the Philippine market. In case you missed it, Nissan Motor Company now has a 34% stake in Mitsubishi Motors after an acquisition deal was finalized in October last year.

“Mr. Oshikiri is in a better position to negotiate for this,” my source added. “We have a better chance of making it happen with him as our president.”

Will Nissan concede?

During a teleconference with the media last year, Nissan chairman Carlos Ghosn said: “[Nissan and Mitsubishi] will collaborate on product development. For technological development, collaboration will become more common, but the products will be different. What the customer will see and experience will be totally different, in line with the DNA of both brands.”

Mr. Ghosn then pointed out that coming up with just one new vehicle platform “costs about $500 million. We have nine common platforms between Mitsubishi and Nissan. Instead of building our own platform, we can use our partner’s. A partner will have to pay for the use of the other’s platform, but this is cheaper than building one from scratch.”

Who’s ready for a new Mitsubishi van?

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