Another Chance

Takashi Nishioka, the new chairman of Mitsubishi Motors Corp. (M.M.C.), has a difficult job ahead. While Japan is the birthplace of some of the world’s most successful auto manufacturers–Honda, Nissan, Toyota–Mitsubishi is one of the most troubled. The company has been shaken over the past year by revelations of long-running campaigns in various divisions to cover up critical manufacturing defects, some of which have proved lethal. Many large investors, including DaimlerChrysler and Japanese private-equity fund Phoenix Capital, have begun selling off their stakes or announced that they plan to do so soon, leaving questions about M.M.C.’s survival. Japanese sales dropped 40% in 2004, with $2.2 billion in losses in the first nine months of this fiscal year. Into this mess steps Nishioka, also chairman of M.M.C.’s onetime parent (and still major shareholder), industrial-equipment maker Mitsubishi Heavy Industries. He has orchestrated a $5.2 billion cash infusion and announced a restructuring and cost-cutting plan. A similar $4.7 billion bailout last year was billed as M.M.C.’s “last chance.” If Nishioka can’t engineer a dramatic turnaround, this may be the last “last chance.” –By Jim Frederick