Mitsubishi's Rich Gilligan: Must lead the Normal, Ill., plant's second turnaround.
It will be the second time that Gilligan, 60, has wrought major changes at Normal. In 1999, the former Ford Motor Co. plant manager was brought in to cure the plant's inefficiencies, improve product quality, reorganize management and stop its 10-year flow of red ink.
Mitsubishi rewarded his efforts with plant investment and new models in the past four years. But new troubles with quality in Japan, sales and marketing problems in North America and DaimlerChrysler's decision not to invest in future Mitsubishi product have stalled the company.
Gilligan discussed the outlook from his office in Normal with Staff Reporter Lindsay Chappell.
You engineered the turnaround at the Normal plant in 1999 when Mitsubishi faced a large head-count reduction. How will this one be different?
In 1998 and '99, we had to deal with improving quality, productivity, the labor environment and profitability. And at the same time, we were looking at taking on new products. In 1998, we were woefully inefficient. But since then, we've demonstrated that we know how to run this place from a profitability and quality point of view. So this time the mission is more tactical. The situation we're now facing is more of a direct reflection of our market demand.
You're eliminating your second work shift, and yet you're increasing productivity.
Back in February, in response to the market, we reduced our line speed from 60 jobs an hour to 52. We will now go back up to 60, once we make the reductions we have to make. Sixty is where we need to be. The optimal model for us is a nine-hour shift. That will give us an annual capacity of about 140,000 vehicles a year.
Is the Normal plant sustainable long-term at the 140,000-unit-a-year level?
It's not expected that we will stay at this level indefinitely. We've got to get the foundation back to where we can begin to build from a breakeven point. We've established our break-even point at 60 jobs per hour. Once we set up to run our operations on a breakeven basis, we'll never slip into a loss situation.
How critical will additional product be for you?
The challenge is to bring this place to its full potential. We're obviously receptive to new product. But things have unfolded very quickly in the past few months. So it's just too soon for any decisions about long-range product.
As you point out, the events that led to your situation - the fallout between DaimlerChrysler and Mitsubishi, the collapse of product plans between the automakers - all happened quickly. Were you and your team as surprised as everyone else?
It was a surprise that the relationship did not continue. But it happened, and now it's time to move on. We've got very capable leadership in both Japan and North America, and we're ready to get going. We have a new coupe coming out next spring and a new convertible next fall. Keep in mind that we're building six models here - three coupes, a convertible, a sedan and an SUV. Not many people can do what we do.