DaimlerChrysler AG may launch a full takeover of crisis-struck Mitsubishi Motors Corp. (MMC) after renegotiating its partnership with the Japanese automaker, a report said Monday.
"If that is feasible under the current agreement, then it is the right thing to do," DaimlerChrysler's Rolf Eckrodt, who was named MMC's new chief operating officer on Friday, told the Financial Times.
"The task will determine my time horizon, but I expect to do the job for the next three years," Eckrodt said in an interview.
DaimlerChrysler said Friday it was now paying 202.4 billion yen (1.9 billion dollars) to take a 34-percent stake in MMC, 10 percent less than the two companies agreed when they unveiled an alliance in March.
The move came as company president Katsuhiko Kawasoe said he would resign to take responsibility for MMC's cover-up of at least 64,000 complaints about vehicle defects since 1977.
Eckrodt, the 58-year-old head of the German-US auto giant's Adtranz railway subsidiary, will take charge of day-to-day operations at the troubled Japanese automaker.
"I have implemented a lot of restructuring programs in relatively short periods of time," he said of the challenge awaiting him at Mitsubishi.
He will have a similar task to Carlos Ghosn, who is overseeing a sweeping restructuring at Nissan Motor Co. Ltd. in his capacity as chief operating officer and president of the ailing Japanese firm.
Ghosn was imported from Renault SA after the French carmaker bought a 36.8 percent stake in Nissan last year.
MMC is saddled with vast debts of over 1,470 billion yen and a severely tainted reputation because of the recall scandal.
Eckrodt is likely to start his new job early next year "but he may juggle both posts in the interim," the Financial Times said.
Moody's Investors Service welcomed the revised deal with DaimlerChrysler as it confirmed MMC's Ba1 long-term credit rating, with a stable outlook.
The alliance "will enhance the company's ability to reduce debt, strengthen its competitive position and improve its operating efficiencies," the credit risk appraiser said.
But the Japanese firm had to successfully manage the public-relations damage caused by the recall scandal, Moody's warned.
MMC's battered share price slumped another 19 yen to 385 on the Tokyo Stock Exchange. The stock has lost over 18 percent since the scandal first surfaced in Japanese press reports in mid-July.
Swedish truck maker Volvo AB meanwhile may be forced to renegotiate its own partnership with MCC if DaimlerChrysler takes full control of the Japanese firm, the Financial Times added.
Volvo, DaimlerChrysler's main rival in the truck market, has a five-percent stake in MMC.
The Swedish and Japanese firms plan to hive off their commercial vehicle divisions into a new truck and bus joint venture, to be owned 19.9-percent by Volvo, in July next year.
But Volvo had "expressed disquiet over the prospect of DaimlerChrysler controlling up to 80 percent of the truck and bus business after three years," the newspaper said.
The original DaimlerChrysler-MMC deal had put a 10-year freeze on the Stuttgart-based giant increasing its stake in the Japanese firm. But this was brought down to three years under the new terms announced Friday. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
