Mitsubishi President Steps Down

T O K Y O, Sept. 8 -- German-U.S. automakerDaimlerChrysler tightened its grip on scandal-hit MitsubishiMotors today by dispatching a key troubleshooter toJapan in a prelude to a potential takeover in three years time.

Taking advantage of Mitsubishi’s woes over a consumercomplaint cover-up, the world’s number three carmaker agreed tosend senior executives to its Japanese partner with the task ofoverhauling its operations.

They will be headed by Rolf Eckrodt, the tough boss ofDaimlerChrysler’s unit Adtranz, who will become chief operatingofficer at Mitsubishi Motors (MMC), the world’s tenthbiggest car firm.

Their alliance focuses on small cars, but industry sourcesindicated DaimlerChrysler’s interest in MMC’s commercial vehicle business could put it on a collision course with Volvo, which isdue to take a 20 percent stake in Mitsubishi’s truck unit.

Stake Stays the SameContrary to some expectations, DaimlerChrysler did notincrease its 34 percent stake in Mitsubishi Motors, but itrenenegotiated its price down to $1.9 billion from $2.1 billion.

Unlike German rival BMW AG, which lost billions of dollarsand put its independence at risk by taking over Britain’s ailingRover Cars, DaimlerChrysler made clear a takeover was an optiononly when Mitsubishi was back on track.

“DaimlerChrysler AG is entitled to increase its stake inMitsubishi Motors Corporation after a period of three yearswithout limitation,” it said in a statement.

DaimlerChrysler also avoided consolidating its troubledpartner so that its balance sheet is not burdened withMitsubishi’s 1.47 trillion yen ($13.95 billion) debt.

Analysts welcomed the move, noting that the German-U.S.group managed to strengthen its foothold in Asia at a relativelylow risk while gaining the freedom to launch a completetakeover.

“For DaimlerChrysler, this gives a completely new complexionto the situation. The price reduction was not a big issue,”Schroder Salomon Smith Barney analyst John Lawson said.