CEO of Mitsubishi N.A. resigns

THE BALTIMORE SUN

Finbarr O'Neill insists he didn't abandon a foundering ship only 16 months after taking over as president and CEO of Mitsubishi Motors North America, the U.S. distributor of the Japanese vehicle line.

Yet on Tuesday, the day that Mitsubishi reported a 37 percent decline in new-vehicle sales for 2004, O'Neill resigned to become president and CEO of Reynolds & Reynolds of Dayton, Ohio, which provides data processing, computer, Web site, sales and management training services for the nation's auto dealers.

"I didn't bail out over concerns with Mitsubishi," O'Neill insisted in a phone interview yesterday.

His resignation from Mitsubishi comes at a time when rumors are rampant about the company's chances for survival in the United States and fears that its only U.S. plant, in Normal, Ill., might close.

To make matters worse, Mitsubishi's parent in Japan is so deep in debt that even DaimlerChrysler AG, which owns an equity interest, refused to help fund its recovery. In addition to shaky financing, the parent is suffering from scandals involving executive cover-ups of product defects to avoid recalls.

O'Neill insists he wasn't forced out but rather heard from an executive recruiter in November, received an offer on Christmas Eve and accepted Monday.

In the interview, O'Neill, 52, dismissed rumors that the Normal plant was headed for closure, despite the company's move in October to cut to 1,200 jobs and one shift.

"I understand all that, but as outgoing president all I can say is there are no plans to close the plant. I believe Mitsubishi can succeed, and I don't want my leaving to be understood as a negative on Mitsubishi. It was an opportunity to work at Reynolds. This was a personal decision, not a decision about Mitsubishi," O'Neill said.

Still, some observers remain skeptical.

"I've gotta believe he saw some ugly handwriting on the wall, that sales didn't look very good and he wasn't going to be able to turn around the company in a reasonable time frame," said Joe Phillippi, principal with AutoTrends in Short Hills, N.J., an automotive research and consulting firm.

"Finbarr is a very capable, competent executive. But I think with all the problems at Mitsubishi, it got to be too much and he decided it would feel better to quit hitting himself over the head with a 2-by-4," said Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

"Did he succeed or fail at Mitsubishi? You have to give him an incomplete, because the job isn't done yet and Mitsubishi's future is uncertain," Cole said.

O'Neill joined Mitsubishi in 2003 after having been president and chief executive of Hyundai's U.S. operations. He gained attention as a reclamation expert by leading the then-foundering South Korean automaker to huge sales gains in the United States.

To O'Neill, however, Hyundai was easier to fix than Mitsubishi. The latter company's image was unclear to potential buyers, who were bombarded by flashy, youthful advertising that said little about its cars.

"Hyundai only had to overcome an issue of poor quality," he said, which he cured with an emphasis on quality control at the plant and a 10-year/100,000-mile new-vehicle factory warranty to back the boast that they were better built.

"However, when I joined Mitsubishi, it was financially challenged and faced scandals in Japan. In the U.S., the focus was about music in the ads and youth and not product. While you don't throw out the baby with the bath water, the focus has to be about product and a youthful mindset," he said.

"Mitsubishi needs to establish a brand image and a reason for being. That's a gradual process and hasn't been done yet."

O'Neill says that despite the automaker selling only 161,609 cars in the United States last year, and cutting back production at the Normal plant, the company is still poised for a rebound.

"Some of the tough decisions I made at Mitsubishi don't show up in the sales reports," he said. "We're now ready to launch a new Eclipse [coupe this spring] and Raider [mid-size pickup truck this fall]. We've got the products in place to establish Mitsubishi as a fun and dynamic brand once again. [Mitsubishi] recently did a study of 7,500 consumers that showed people are still willing to pay for a Mitsubishi product," O'Neill said.

But not everyone is ready to believe that buyers are ready to flood the automaker's showrooms.

"Based on sales, buyer consideration is plummeting. Nobody says they want to look at a Mitsubishi and be left with an orphan," said Art Spinella, general manager of CNW Marketing Research, in Bandon, Ore.

Spinella said his company's studies show that 89 percent of those who say they would like to buy a Mercedes buy a Mercedes and 37 percent of those who say they want to buy a Chevy buy a Chevy. But only 8 percent who say they want to buy a Mitsubishi buy a Mitsubishi.

O'Neill's departure also does little to quell fears that the Normal plant is in jeopardy.

"The industry is no longer characterized as a growth market," said AutoTrends' Phillippi. " ... It's an industry with excess capacity whose sales would collapse without incentives."

The Chicago Tribune is a Tribune Publishing newspaper.

Copyright © 2020, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
48°