Kazuo Tsukuda
1943–



President, Mitsubishi Heavy Industries

Nationality: Japanese.

Born: September 1, 1943.

Education: University of Tokyo, BS, 1966; University of Tokyo, MS, 1968.

Family: Married Yoshiko (maiden name unknown).

Career: Mitsubishi Heavy Industries, 1968–1979, engineer; 1979–1981, liaison to Westinghouse; 1982–1995, steam-turbine engineer; 1995–1999, deputy general manager, Takasago Machinery Works; 1999–2000, general manager, Nagoya Machinery Works; 2000–2002, general manager, industrial-machinery division; 2002–2003, managing director and general manager, Global Strategic Planning and Operations Headquarters; 2003–, president.

Address: Mitsubishi Heavy Industries, 16-5 Konan 2-chome, Minato-ku, Tokyo, Japan 108-8215; http://www.mhi.co.jp.

■ Kazuo Tsukuda became president of Mitsubishi Heavy Industries at a time when Japan's economy was struggling. He believed that his company's best chance for growth was to look overseas for new markets. His earlier work at Mitsubishi Heavy Industries had contributed to its recovery from a downslide in 1999, helping to make the company a pillar of strength upon which much of the larger Mitsubishi Corporation relied. A friendly, relaxed man, he had an incisive mind and a willingness to make tough decisions that belied his modesty.

JOINING A POWERHOUSE

As a child, Tsukuda was curious about how the world worked. He listened to the radio, but rather than focus on the program, he would wonder how the sounds could travel all the way to his little radio. As he grew up, his curiosity took a scientific direction, and he became an engineer. One month after graduating from the School of Engineering of the University of Tokyo in March 1968 with an advanced degree in engineering, Tsukuda joined Mitsubishi Heavy Industries.

Mitsubishi Heavy Industries was one of the largest and most powerful parts of one of Japan's largest and grandest keiretsu , Mitsubishi Corporation, which was composed of hundreds of smaller companies. A keiretsu is a group of Japanese companies that are united not only by their parent company but also by owning shares of each other. Members of a keiretsu were expected to do as much of their business as possible with each other, while excluding outsiders; more than most keiretsu , Mitsubishi Corporation was extremely devoted to keeping business within the member companies, which contributed to it financial difficulties in the 1990s and 2000s.

Mitsubishi Heavy Industries was one of the largest and most powerful members of the Mitsubishi keiretsu . It had been founded in 1884 by Yataro Iwasaki, who leased the Nagasaki shipyard from the Japanese government; he called his new venture the Nagasaki Shipyard and Machinery Works. He created a shipbuilding business that in 1934 was renamed Mitsubishi Heavy Industries. It was Japan's biggest company, making heavy machinery for transportation, especially ships, as well as for manufacturing. During the previous 50 years, Iwasaki and his successors drew together many other manufacturing companies, that were united because all were owned by family members. An organization of companies held by a single family was called a zaibatsu ; a keiretsu was not necessarily bound by family but was held together by member companies owning shares in one another.

During World War II, Mitsubishi Heavy Industries built warplanes, including the infamous Zero, warships, and other weapons for the Japanese military. Some in Japan, as well as the Allies, viewed the Mitsubishi zaibatsu as having promoted the war in order to expand its sales. After Japan's defeat, the zaibatsu was broken up. On January 11, 1950, a recently passed Japanese law that was intended to prevent companies from achieving such immense economic power led to the breakup of Mitsubishi Heavy Industries into three parts, the Central, West, and East Japan Heavy Industries. The company was rebuilt, however, through the mutual shareholdings of the companies, reappearing in 1964 as Mitsubishi Heavy Industries, Limited. By the time Tsukuda joined it, Mitsubishi Heavy Industries was a powerhouse; it was one of the elite companies for engineers to work for, and any college graduates who were fortunate enough to join it were supposedly secure for life.

Mitsubishi Heavy Industries became a builder of huge machines and huge projects; it built nuclear-power plants, aerospace rockets, high-end aircraft, industrial machines, steel plants, and chemical plants. Tsukuda worked mostly on power plants, becoming a specialist in the design and manufacture of the turbines that generate electricity. He also became an expert in making efficient designs, creating ever-more elegant generators that became smaller while generating more energy and less pollution.

In 1979 Tsukuda was sent to the United States, where he spent three years as one of Mitsubishi Heavy Machinery's representatives at Westinghouse as part of a manufacturing partnership. He worked on steam turbines. The period in the United States changed much of his outlook on business. He later recalled that he went to America while Japan was a rising economic power, with people regarding Japanese businesses as examples of how businesses should be run efficiently, but he discovered something different: the great depth of research and development at Westinghouse, which created a deep background of technical know-how that Mitsubishi Heavy Industries did not have. He regarded his experiences at Westinghouse as a revelation, and when he returned to Japan, he became an advocate for in-depth basic research such as he had observed in the United States. His outspoken advocacy probably made life occasionally difficult for him, because for many years thereafter the leaders of Mitsubishi Heavy Industries expressed hostility at conducting business like Americans, regarding the idea of doing so as un-Japanese.

MOVING UP

In 1998 a reporter asked the chairman of the board of Mitsubishi Heavy Industries, Kentaro Aikawa, whether American-style management might help Mitsubishi Corporation recover from a decline in its fortunes, and Aikawa replied, "We are not concerned with return on equity … if foreign investors don't see merit in our stock, they can sell it" ( Forbes.com , April 20, 1998). Given that attitude, it is remarkable that Tsukuda advanced at all, because he was advocating that his company not just satisfy present customer needs, but that it get a jump on the future by anticipating what customers would want in years to come. In December 1995 Tsukuda became deputy general manager of Takasago Machinery Works. At that time, promotions were usually determined mostly by seniority rather than achievements or ability, which gave Tsukuda an edge as a 27-year employee who had patiently waited his turn.

In 1998 Mitsubishi Heavy Industries owned 24 percent of Mitsubishi Motors, a matter that changed the fortunes of many in the Mitsubishi keiretsu . Mitsubishi Motors was in trouble as revelations of misconduct and cover-ups of defects in its automobiles sent sales plummeting and threatened to take Mitsubishi Heavy Industries with it into bankruptcy.

Mitsubishi Heavy Industries grossed $26.943 billion while losing $1.284 billion. It had $43.805 billion in assets and a market value of $11.702 billion. That meant it was large, but not large enough to continue to endure yearly losses roughly equal to 11 percent of its market value. Tsukuda found himself moving up the corporate ranks with extraordinary speed. In April 1999 he became general manager of Nagoya Machinery Works, and the following June he also a member of the board of directors. In April 2000 he became general manager and a member of the board of directors for the industrial-machinery division of Mitsubishi Heavy Industries. Two months before that promotion, Princess Cruises ordered two cruise ships from Mitsubishi Heavy Industries; they would be the first large passenger ships built in Japan in a decade.

With the industrial-machinery division in Meiki, Tsukuda ran a factory the size of a city and supervised 1,300 employees. It was in some ways an example of what Tsukuda had spent most of his career developing—ever-smaller equipment doing ever-bigger jobs. The factory manufactured engines that themselves were increasingly small and efficient; in August 2001 it introduced an engine that was 40 percent lighter and 35 percent smaller than its forerunner, producing the same power with less pollution. Tsukuda wore the same blue uniform as all of his employees, but he stood out as a visionary. He saw the smaller, more efficient engines as part of his company's contribution to saving the global environment by reducing waste and pollution.

In April 2002 Tsukuda took a big step up into Mitsubishi Heavy Industries' leadership when he was appointed a managing director and the general manager for the Global Strategic Planning & Operations Headquarters. He stayed on as general manager for the industrial-machinery division until October. That month there was a fire at the Nagasaki shipyards, in which the first of the two cruise ships under construction was damaged. Also during that period, F-4 aircraft were sabotaged at the company's Nagoya Aerospace Systems Works. After negotiations with Princess Cruises, Mitsubishi Heavy Industries arranged to have the second of the planned ships delivered first. In response to the F-4 sabotage, security was increased; security would be a special concern for Tsukuda when he became president.

PRESIDENT

On March 31, 2003, Tsukuda became president of Mitsubishi Heavy Industries, replacing Takashi Nishioka, who became chairman of the board; the company did not have a chief executive officer. It was the end of the fiscal year, and Mitsubishi Heavy Industries had grossed $21.643 billion and netted $286.5 million, an increase of 43.7 percen over the previous yeart. It had 61,292 employees and 14 divisions. About 90 percent of Mitsubishi Heavy Industries' sales were in Japan, with 19 percent of sales in aerospace manufacturing, 25 percent in building nuclear-power plants, 40 percent in construction and heavy machinery, and the rest in marine industries such as freighters, offshore platforms, and cruise ships. Tsukuda's international outlook quickly showed itself: On June 18, 2003, Mitsubishi Heavy Industries won a bid to build a $1.54 billion power plant in Taoyuan, Taiwan. By the end of the year Tsukuda expressed confidence that Japan's economy, which had been flat for several years, would improve along with the U.S. economy.

On February 26, 2004, the Diamond Princess cruise ship was launched in Nagasaki. Tsukuda's wife, Yoshiko Tsukuda, christened the ship, and she was named its godmother in a Shinto ceremony. The 116,000-ton ship was a symbol of pride for Mitsubishi Heavy Industries, as was its sister ship the 116,000-ton, 18-story-high Sapphire Princess , which was launched on May 27, 2004. On April 23, 2004, Kazuo Tsukuda announced that Mitsubishi Heavy Industries would build a new factory, probably in Nagoya, to manufacture wings for Boeing's B7E7 passenger aircraft beginning in 2008. He said that the factory would be a start toward the objective of having Mitsubishi Heavy Industries build its own small civilian aircraft.

On June 17, 2004, Mitsubishi Heavy Industry formed a partnership with Hitachi by merging parts of their air conditioning-manufacturing units. With over nine thousand employees, the merged firm created Japan's second-largest manufacturer of air conditioners, which Tsukuda hoped would be able to prepare for an expected boom in China's demand for air-conditioning. In an example of Tsukuda's anticipating the needs of the marketplace with new technology, in 2004 the company introduced a robot designed to help elderly and handicapped customers. It could speak and understand 10,000 words, and its camera eyes could be accessed by telephone; if the person it cared for was unresponsive, it summoned help.

See also entry on Mitsubishi Heavy Industries, Ltd. in International Directory of Company Histories .

sources for further information

"Always One Step Ahead of the Market," Forbes.com , http://www.forbes.com/specialsections/japan/17_tsukuda.html .

"An Interview with President Kazuo Tsukuda," Mitsubishi Heavy Industries , http://www.mhi.co.jp/efin/a2003/interview.htm .

Weinberg, Neil, "Setting Sun," Forbes.com , April 20, 1998, http://www.forbes.com/global/1998/0420/0201038a.html .

—Kirk H. Beetz



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