Mitsubishi’s survival genes

In a previous part of our lives before we had kids, my wife and I learned about wine as we travelled. We visited vineyards and stayed with winemakers that had become our friends. So I was quite happy to visit an award-winning winery in Japan that was part of the Kirin Company, which in turn was part of the Mitsubishi Group.

I took photos of the winery, and as all tend to do, posted photos on my carsandcalibres Instagram account. I was then surprised at the sheer number of questions that basically asked “Does [Kirin] now belong to Nissan?”

If I hadn’t listened to the head of Mitsubishi Motors Corporation explain things the day before, I would have had the same question.

It turns out that we don’t know as much about Mitsubishi as we thought in spite of the fact that the name has been on our lips and in our garages for decades. More importantly perhaps, the company stayed in the Philippines when many others had decided to leave.

When we say the Mitsubishi Group, we need to understand that it is exactly that. It is a group of relatively independent companies that falls into a community.

The community part is important, because listening to the directors explain and then looking back at history, you really do see that community plays a large part in decision-making.

As per the companies’ own statements, there are approximately 600 member companies in this community, 29 of which form an informal group of core Mitsubishi companies they call the Kinyokai.

All the companies look back to a shipping company started in 1870 by Yataro Iwasaki.

One key point is that, unlike many other large global conglomerates, there is no holding company. The companies may have large percentages of stock holders that are common to many, but they are run independently—and indeed, may sometimes even compete.

They will try to cooperate in certain areas but are not necessarily bound to work with each other. Still, the synergies are clear.

In this recent visit to Japan to tour an MMC factory, we stayed at a hotel owned by the group, and visited realty holdings and developments within the group.

The leaders of the companies do point to something common that they truly try to keep in mind, and these are the Three Principles as put forth by Koyota Iwasaki, the fourth president of the old Mitsubishi organization. These are Corporate Social Responsibility, Integrity and Fairness, and Global Understanding Through Business.

You could look at this and say that it is just a mantra conjured for public relations, but then you again look at the history and you see that it has pretty much held true.

They tend to believe that individual growth comes from community growth, and that the way forward is to have different entities work together, to bring each other upwards, and to help when needed.

This support structure isn’t just corporate, as we see looking back to the time when the only cars we could buy new in the Philippines had the three-diamond mark.

Even the MMC decision to drastically grow their facilities and abilities in the Philippines, as explained by MMC president and CEO Osamu Masuko, showed their way of thinking.

The Philippines has so much going for it when others were slowing. The local affiliate of Mitsubishi in the country could just import cars, but that would not spread the growth around.

There is no question that MMC sees profit opportunities, but it also recognizes that when the entire population makes long-term moves toward growth, it is for the better of all.

The Philippines is in a far better position than Japan, Masuko said, and the Philippines has so much growth to look forward to.

The alliance between MMC and Nissan helped create one of the largest automotive groups in the world, and yes, to complement each other.

MMC has a competitive edge in light trucks and the Asean, for example; Nissan is strong in the US market, while Renault is in Europe.

Also, as Masuko explained, MMC has been working on electric propulsion for decades and develops their expertise internally.

Compare that to Renault which just announced the use of Continental-developed support hybrid systems for their Scenic diesels and you can see the usefulness of experience.

When Nissan chair and CEO Carlos Ghosn discussed the direction of the new organization, he made clear that Mitsubishi Motors would still be Mitsubishi Motors.

They would look for synergies in expertise and market, but each brand would continue to create its own vehicles.

While Nissan became the largest single shareholder of MMC, it is interesting to note that 51 percent of all MMC shares are held by either Nissan or the core long-term institutional shareholders, namely Mitsubishi Heavy Industries, Mitsubishi Corporation, and The Bank Of Tokyo-Mitsubishi UFJ.

Ghosn was nominated to become chair of the MMC board; Matsuko retained his executive position.

In discussion, he spoke of how important it was to be able to look past the need for individual and independent acclaim when you had to push forward as a group and as part of a community.

The importance of this was stressed again as we sat at the MMC headquarters with President Masuko all the while keeping a close check on the results of the US elections happening that very day.

This is proof that we really don’t know what may happen, he said. No one seriously expected Donald Trump to win—just as now we as a car company are looking at competition from products that don’t trace their roots to automobiles but to technology like Tesla or even consumer goods like Dyson, he added.

Interestingly, because the Mitsubishi Group has independent companies within their community that work and compete in these and more diverse industries and already have a flexible attitude, it may be well positioned to enter a future where synergies between different industries will be even more commonplace—and hopefully one where the sense of community plays an increasingly important role.