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14th September 2000
Page 12
Page 12, 14th September 2000 — Germans shave offer
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Which of the following most accurately describes the problem?

• by Colin Barnett

Mitsubishi Motors Corporation is literally paying the price of its recently uncovered transgressions, as DaimlerChrysler shaves 10% (£140m) off the price it will pay for a 34% stake in the Japanese company. It has also agreed an option to increase its stake "without limitation" in three years.

Mitsubishi's president. Katsuhiko Kawasoe, will resign in eight weeks, to be replaced by international operations chief, Takashi Sonobe. Its board is to be expanded to include the new post of chief operating officer, filled by senior DaimlerChrysler executive Rolf Eckrodt, who will effectively contral all aspects of the company.

DaimlerChrysler will also "allocate additional know-how and management capacity...by dispatching highly experienced specialists and managers."

The changes follow Mitsubishi's admission that it covered up consumer complaints, so preventing vehicle recalls over a 20-year period. Japan's Ministry of Transport is expected to press for criminal proceedings against the company.

• Volvo has confirmed that it is considering increasing its stake in Mitsubishi, "if the price is right".

It currently holds 5% of Mitsubishi with a commitment to own 19.9% of Mitsubishi Fuso Truck and Bus Company when it is formed next year.

Some reports suggest that Volvo would be keen to match DaimlerChrysler's stake.


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