Chairman, Mitsubishi Corporation
Born: October 8, 1937.
Education: Waseda University, BS, 1960.
Career: Mitsubishi Corporation, 1960–1966, engineer in machinery division; Mitsubishi International, 1966, manager; Mitsubishi Corporation, 1966–1971, manager; 1971–1977, heavy machinery department; Mitsubishi International Corporation, 1977–1979, head; 1979–1981, president; 1981–1985, heavy machinery department; 1985–1989, general manager, heavy machinery department; 1989–1991, general manager, ship and plant division; 1991–1993, executive vice president; 1993–1998, president and chief executive officer; Mitsubishi Corporation, 1994–1998, managing director; 1995–1998, managing director of administration; 1998–2004, president and chief executive officer; 2004–, chairman of the board.
Address: Mitsubishi Corporation, 6-3 Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8086, Japan; http://www.mitsubishi.co.jp.
■ When Mikio Sasaki was hired by the Mitsubishi Corporation in 1963, it was in a very different economic climate than the one in which he became the company's leader. In those days, Mitsubishi sought out the best college graduates and usually got them; a job with Mitsubishi was not only a secure job for life but was also an elite job with one of Japan's greatest economic powerhouses. Yet when Sasaki became president and chief executive officer of Mitsubishi Corporation, the company was losing money by the hundreds of millions of dollars, and its once proud Mitsubishi Motors was collapsing in scandal and falling income. Sasaki introduced sweeping reforms to corporate organization and governance and dramatically changed the way Mitsubishi Corporation did business.
The company's symbol of three diamonds touching at a point came from Mitsubishi's name, which means three diamonds. The company was founded in 1870 as a zaibatsu , which meant that it was a family-owned holding company. Its founder was Yataro Iwasaki, a nobleman descended from samurai. By the 1930s Mitsubishi Corporation had become one of Japan's most powerful keiretsu . The keiretsu were vast holding companies composed of numerous small companies that were interrelated by doing business with each other and that usually owned shares of each other. Member companies of keiretsu were expected to do business with each other first and to consult with each other before doing business with outsiders. Although young for a keiretsu (for instance, Sumitomo's origins date to the early 1600s), Mitsubishi had become a dominating collection of industries. It and the other keiretsu were blamed by many for the militarism of Japan that instigated World War II, and the power of the keiretsu was curtailed by the United States after World War II.
By April 1960, when Sasaki joined the company after having earned a BS degree in industrial engineering and management from Waseda University in Tokyo, Mitsubishi Corporation had recovered much of its economic power and was composed of hundreds of subsidiaries that were linked not only by cross-shareholdings but also by a common corporate culture in which employees were cultivated like family, seniority ruled most promotions, and total income mattered more than profits. Sasaki had a strong scientific bent to his thinking, and over many years he distinguished himself in scientific studies of new technologies. In March 1966 he was briefly assigned to Mitsubishi International in Duesseldorf, West Germany. In November 1966 he was transferred to the London branch of Mitsubishi Corporation in an era in which Mitsubishi was trying to expand its partnerships with British industries.
In November 1971 Sasaki was transferred to Tokyo to work in the heavy machinery department of Mitsubishi Corporation. In November 1977 he was sent to Tehran as chief of the Iranian operations of Mitsubishi International Corporation (a subsidiary of Mitsubishi Corporation); in September 1979 he was made president of Mitsubishi International Corporation, Iran. He gained a strong background in the oil and natural gas business that would serve him well in the 2000s, when he expanded Mitsubishi's oil operations in Russia and natural gas operations in Alaska.
Historians often referred to the 1980s as an economic bubble for Japanese businesses because Japanese companies seemed very wealthy but proved to be fragile when the bubble eventually burst. In June 1981 Sasaki was transferred back to the heavy machinery department in Tokyo. In 1984 the Mitsubishi keiretsu pooled its resources to buy shares of its Mitsubishi Oil Company when the U.S. company Getty Oil company tried a hostile takeover of the petroleum development company. This practice was common for Mitsubishi Corporation; it owned banks, life insurance companies, and other potential lending companies, and when a member of the keiretsu was threatened by an outsider or by financial losses, the financial companies would lend it money, and other members of the keiretsu would buy shares in it to protect it.
In February 1985 Sasaki was named the general manager of the heavy machinery department. In July 1989 he was appointed general manager of the ship and plant division, a complex interrelationship of keiretsu companies that included the manufacture of luxury ocean liners. During the 1970s and 1980s many American journalists were alarmed by Japan's increasing economic influence in the United States, and politicians found the issue of Japanese influence to be one that stirred the emotions of American audiences. Mitsubishi Corporation fueled the alarm in 1989 by buying 51 percent of Rockefeller Center in New York City. Mitsubishi Motors had a 27 percent increase in its share of the automobile market in the United States that year, and Mitsubishi Corporation's electronics companies were gaining large shares of global markets. In Japan this phenomenon was called "Mitsubishification."
Yet the signs of troubles were present. Predicted domination of computer chips by Japanese companies failed to come to pass while such American companies as Intel, AMD, and Cyrex all surpassed Japan's state-subsidized computer companies. Mitsubishi Corporation made a costly gaffe by insisting on using a proprietary computer operating system rather than one produced by Microsoft, Apple, or IBM; in the 1990s this misjudgment would cost Mitsubishi most of Japan's own computer consumers.
In March 1991 Sasaki became executive vice president of Mitsubishi International Corporation and was stationed in New York City, where his fluency in English would be of good service. In 1992, although he remained in America, Sasaki was named to the board of Mitsubishi Corporation, which meant that he was by then considered to be a major player in corporate governance. What Sasaki found was a board looking for a plan, with the Mitsubishi Corporation moving from one small crisis to another, as some member companies struggled to survive at home against strong competition from American and European companies, even though the Japanese government protected most Japanese industries with high tariffs and sometimes prohibitions against foreign products.
In April 1993 Sasaki was named president and CEO of Mitsubishi International Corporation. In this position he invested Mitsubishi's time and money in new technologies, often with extraordinary foresight. For example, in 1993 he began Mitsubishi Corporation's research and development in fullerenes, which were molecular clusters of carbon, forming closed shells that Sasaki described as looking like soccer balls. Ten years later Sasaki would say that he could still recall the moment a staff member told him about fullerenes, remembering that he instantly was taken by the potential of the arcane field of study. He took direct charge of the research and manufacture of fullerenes for all the rest of his career at Mitsubishi. In fullerenes Sasaki envisioned the emergence of nanotechnology, a field of microscopic machines. Under Sasaki's leadership Mitsubishi developed manufacturing techniques that in the 2000s made Mitsubishi the only mass producer of fullerenes, which had a host of applications from cures for some cancers and treatments for other diseases to the manufacturing of super-strong composites of metals and polymers. To develop the possibilities of polymers, Sasaki did something that was very rare for Mitsubishi Corporation—he forged partnerships with companies outside of the keiretsu .
In June 1994 Sasaki was made a managing director of Mitsubishi Corporation. This position meant more than being a member of the board of directors; Sasaki had management responsibility for some of the company's operations, beyond his continuing responsibilities as president and CEO of Mitsubishi International Corporation. In June 1995 his responsibilities were further defined as managing director of administration for Mitsubishi Corporation. At the time, the parent company of the keiretsu , Mitsubishi Corporation, had about eight thousand employees, most of whom were older men who had spent decades rising through the ranks on the basis of seniority. They managed the bewildering mix of hundreds of companies that were separate entities within Mitsubishi Corporation, and Sasaki was responsible for overseeing the organization and communication of these senior managers.
In 1997 Mitsubishi Corporation began to unravel. It had invested heavily in Thailand and Malaysia, especially in automobile manufacturing, and in 1997 Thailand suffered a currency crisis so severe that many of Mitsubishi's holdings in Thailand became almost worthless. The crisis quickly spread throughout Southeast Asia. Mitsubishi Motors, in particular, had to swallow multimillion-dollar losses. The devaluation of Asian currencies continued into the 2000s, damaging Mitsubishi Corporation's ambitions to develop Asian marketplaces.
In April 1998 Sasaki was named president and CEO of Mitsubishi Corporation; a Mitsubishi Corporation president was expected to serve three consecutive two-year terms and then leave the post, and Sasaki was a logical choice to be the new president, given his extensive experience in foreign markets and his reputation as having a steady temperament and sound judgment. Of interest was the title of CEO. The chairman of the board had previously had the powers of a CEO, which meant that naming Sasaki to the new position of CEO was a break with tradition and an indication that he was to be given the powers to redirect, to reorganize, and to redefine Mitsubishi Corporation, which was in desperate financial trouble, although how desperate would not become public for another couple of years.
In 1998 Mitsubishi Electric, which had made the blunder in computer operating systems, lost $870 million. Mitsubishi Rayon, Japan's largest manufacturer of artificial fibers, was downgraded by ratings companies to the status of a junk stock; the heavy equipment division and 12 other units were downgraded to near-junk stock status. During the summer, without asking the parent company's permission, as was theoretically required, Mitsubishi Corporation's Nikko Securities Company found an outside ally in the American company Citigroup, which bought 25 percent of Nikko Securities for $1.8 billion, helping Nikko Securities stay afloat. Perhaps this move was an example of Sasaki's creating for members of the keiretsu new freedom to take action, although corporate insiders said that within the keiretsu the action of Nikko Securities was regarded as a betrayal.
As Sasaki saw matters, he was faced with a failing business model caused by a number of factors, including the Asian currency crisis, which had collapsed Mitsubishi Corporation's earnings; obsolescence of trading companies, caused by Internet commerce; and a collapse of Japan's social system, one effect of which, he believed, was not just to make the practice of promotion by seniority obsolete but also to make promotion by seniority a handicap for competing in the global marketplace. In 1998 Sasaki launched MC2000, a plan to correct some of Mitsubishi's Corporation's problems by the end of 2000. He wanted not just to reform the company but to transform it, and MC2000 was just the beginning of his broad ambition for the company. He regarded Mitsubishi Corporation as a sogo shosha, a trading company, and he viewed electronic commerce as the transforming power in trading on a global scale.
Sasaki wanted, he said, "to encourage management and employees to abandon precedent and embrace selftransformation as the way forward in the 21st century" ("Mitsubishi Corporation," October 3, 2003). Part of this transformation was to be achieved by radically changing the management personnel of Mitsubishi Corporation. Sasaki laid off two thousand of the parent company's eight thousand employees, and he abolished the seniority system for promotions, instead instituting a merit-based program not only for promotions but also for cash bonuses. This reform was resisted throughout the keiretsu but by 2000 had also resulted in numerous managers in their early forties gaining positions of command; it was Sasaki's goal to promote people into responsible positions at the best time for them, to give each individual employee the chance to do his or her best when he or she was best prepared to do so. To carry out this plan, it was necessary to restructure communications in the company so that upper management would be aware of how employees were performing. It also meant a reform in record keeping because employee performance had to be monitored.
On June 26, 1998, Sasaki tried to explain his actions to investors and business analysts, declaring that he intended to create a company that was a global leader by developing its corporate strategy, by improving its decision-making processes, by boosting its appeal to creative and accomplished potential employees by creating an attractive environment for people of all nationalities, and by making it a value-driven company that served shareholders and partners. He saw the global economy as the place where a future Mitsubishi Corporation would thrive by including employees from cultures other than Japanese and giving them the conditions and resources in which to thrive personally.
In February 1999 Mitsubishi Electric said that it would lose $330 million for the fiscal year. In March 1999 Mitsubishi Materials Corporation and Mitsubishi Chemicals Corporation each projected losses of $200 million. The Bank of Tokyo–Mitsubishi Ltd. had to raise an emergency $2 billion from other members of the keiretsu in order to keep from failing. Mitsubishi Corporation's debt was over $132 billion. This news was serious for Japan as a whole because Mitsubishi Corporation accounted for 8 percent of the gross national product. Japan's economy was flatlining, meaning no growth, and such keiretsu as Dai-Ichi Kangin, Fuyo, Mitsui, Sanwa, and Sumitomo were suffering, too, in part because of poor coordination among member companies. Sasaki responded by cutting and reshaping Mitsubishi Corporation businesses and even allowing new alliances, such as Mitsubishi Oil's merger outside the Mitsubishi keiretsu with Nippon Oil in April 1999. Sasaki also changed how corporate success was to be judged. Previously most of Japan's keiretsu had treated gross as more important than net; this approach was one reason why they were huge, perhaps bloated—during the 1970s and 1980s they acquired new businesses just to increase their sales. Sasaki introduced a foreign idea to Mitsubishi Corporation—a value-added strategy that evaluated employees and their businesses on growth in profits.
In the late 1990s Mitsubishi Motors went through an embarrassing period during which press reports forced it to reveal that since the 1970s it had covered up design flaws that caused many of its automobiles to malfunction, sometimes leading to injury. It had used threats and bribes to stop people from complaining about accidents caused by the flaws. These revelations led to dramatic drops in sales in Japan because of a loss of consumer confidence in Mitsubishi products. Mitsubishi Motors was forced to recall over two million vehicles in Japan alone. Even sales of its trucks, once very strong, sagged. In 1995 Mitsubishi Motors accounted for 11.4 percent of Japan's automobile market, but by 2000 its share had declined to 8 percent and was continuing to fall. In 2000 Mitsubishi Motors lost $750 million on sales of $31 billion and was on its way to losing between $2.21 billion and $2.5 billion for 2000 and 2001 combined.
Some journalists and business analysts said that Mitsubishi Motors was doomed and should go out of business before it took all of Mitsubishi Corporation with it. Instead, Sasaki looked for a manager who met his requirements for adding value to his company, and he found Takashi Sonobe, the leader of Mitsubishi Motors' American operations; while the rest of Mitsubishi Motors had declined, its American branch, under Sonobe's leadership, had prospered. Sonobe was named president and CEO of Mitsubishi Motors in 2001. Further, Sasaki and his team found an outsider to help Mitsubishi Motors: DaimlerChrysler, a German-owned company that had swallowed up America's Chrysler and whose official corporate language was English—a comfortable fit for Sasaki and Sonobe, who were fluent in English. DaimlerChrysler bought 37.4 percent of Mitsubishi Motors for about $2 billion, with the option to buy all of Mitsubishi after three years, and sent German executives to help oversee the company's return to profitability. This plan was part of Sasaki's vision of a company that found talent from other countries.
In 1999 Sasaki created a risk management department to centralize corporate control over investments and loans for Mitsubishi Corporation's companies. He also established the Fullerenes International Corporation in 1999 to manufacture fullerenes; by 2004 it would be manufacturing 40 tons of fullerenes per year, and Sasaki himself had direct control of the research and development department of Mitsubishi Corporation. In 2000 he began MC2003. He wanted Mitsubishi Corporation aggressively to seek out new business partners and new markets. On April 1, 2000, Sasaki established a department for organizing information about logistics, marketing, and finance that he called the "New Business Initiative Group." His restructuring of Mitsubishi Corporation became more coherent as he blended several hundred companies in four hundred departments into 190 units, uniting them by strategies and business models. There were still a great many units, but for Mitsubishi it was revolutionary to have a corporate organization that seemed relatively straightforward. Sasaki drew up charts that showed how all the units were interconnected, revealing a cohesive corporate structure that could have one clear, unifying strategy.
Sasaki had become a national leader, helping the Japanese government negotiate trade agreements with Chile and Mexico. On an international scale he was trying to help Mitsubishi catch up with the 21st century. He said that Mitsubishi Corporation needed to understand and share changes in society at home and abroad. Doing so was a matter of survival for the company, in his view, because in his value-added strategy shareholders' concerns were paramount, and shareholders wanted environmentally safe, socially responsible companies. Thus he agreed to stop a salt reclamation project in Mexico to preserve a lagoon, and he sought to enhance the friendliness for women employees of Mitsubishi's companies.
Sasaki worked every day. He had what he characterized as 1 1/2 free evenings per week, which he devoted to holding meetings with no more than 10 employees at a time. Holding the meetings was an effort to connect with employees personally, and he missed only two of those meetings while he was president. His personal warmth probably helped when he negotiated with Alaska for more Alaskan rights-of-way for piping liquefied natural gas to Mitsubishi shipping and as he worked in eastern Russia to secure rights to develop Russian petroleum fields. In China, Mitsubishi keiretsu members forged partnerships with financial institutions, a breakthrough for the Japanese, who were still regarded with suspicion in China for their depredations in World War II. "'Investment Trader with Multiple Functions' might be an apt description of Mitsubishi Corporation today," said Sasaki in 2003 ("Mitsubishi Corporation," October 3, 2003).
On April 1, 2004, Sasaki became chairman of the board of Mitsubishi Corporation, his traditional three terms as president having expired. Mitsubishi Motors lost $657 million for the fiscal year ending in March 2004. Rolf Eckrodt, the German business leader who was by then president of Mitsubishi Motors, asked DaimlerChrysler for $1.8 billion as part of a bailout plan that included contributions from Mitsubishi's keiretsu ; DaimlerChrysler refused. Sasaki managed to persuade enough lenders to support Mitsubishi Motors to keep it afloat.
See also entry on Mitsubishi Corporation in International Directory of Company Histories .
Bremner, Brian, and Emily Thornton, with Irene M. Kunii, "Mitsubishi: Fall of a Keiretsu," BusinessWeek Online , March 15, 1999, http://www.businessweek.com/1999/99_11/b3620009.htm .
Sasaki, Mikio, "Message from the President and CEO," September 2002, www.micusa.com/documents/MC2002SustainabilityRpt.pdf .
——, "Mitsubishi Corporation—Driven to Create Value," October 3, 2003, http://www.mitsubishicorp.com/en/ir/meetings/031003/speech01.html .
—Kirk H. Beetz