Mitsubishi Motors Corp. and IBM Japan Form Strategic Information Technology Alliance

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TOKYO - 13 Dec 2001: Mitsubishi Motors Corp. and IBM Japan, Ltd. today announced an alliance in which Mitsubishi Motors will outsource information technology systems involving maintenance of current applications, system operations and parts of future application development.

The alliance with IBM marks the first time it will outsource part of its services operations and is an important step in the Mitsubishi Motors Turnaround Plan, a new management vision announced in February that the company says charts a path to stable growth through sweeping structural reforms. The company already has outsourced production of powertrain and front/rear suspension components and announced the spin-off of its automatic transmission and CVT (Continuously Variable Transmission) operations.

While the alliance with IBM is expected to cut costs of current information technology operations, Mitsubishi Motors plans to increase its current overall IT budget by some 10 billion yen a year as it moves into e-business and further aligns its IT operations with those of DaimlerChrysler A.G., which holds a 37.3 percent stake in Mitsubishi Motors.

The alliance is expected to begin operations in April. Terms were not disclosed.

"The Mitsubishi Motors Turnaround Plan aims to revamp business processes in all parts of the company and to revolutionize the structure to generate stable profits in the years ahead,'' said Mr. Takashi Sonobe, President of Mitsubishi Motors Corp. "The partnership with IBM Japan is the first step toward engaging in IT on a global scale and to change processes within Mitsubishi Motors.''

Under Chief Information Officer Bernd Staudinger, who joined the company from DaimlerChrysler Corp. in June, Mitsubishi Motors has established a "Global IT Office'' and formulated a new IT vision to achieve objectives of the Turnaround Plan for its passenger car, truck and bus operations. The alliance with IBM Japan is the first step in implementation of that IT vision.

One of the key goals of the Turnaround Plan is improving efficiencies in work processes throughout the company. Mitsubishi Motors has said information technology provides a potent tool for driving such change and will be aggressively deployed.

For example, a new compact car project aimed at the European-market already is underway and Mitsubishi Motors is looking at platform sharing with the Chrysler group in small and mid-size automotive classes. To maximize the relationship with DaimlerChrysler, development of a common IT infrastructure has begun. The alliance with IBM will provide Mitsubishi Motors with access to IBM's outsourcing expertise within the Japanese automotive industry, as well as around the world.

Part of Mitsubishi Motors' increased focus on information technology will be in the areas of supply chain management and customer relationship management in which IBM has global expertise and experience.

"In the rapidly changing business environment of today, speed in management is the key to success of a company,'' said Mr. Takuma Otoshi, President, IBM Japan. "The importance of IT is increasing because IT supports speed in management. Outsourcing is a very effective management method to speed business transformation. As Mitsubishi Motors' strategic IT partner, IBM Japan will offer support by utilizing its know-how and skills cultivated as a leader in the outsourcing business within the Japanese automotive industry.''

IBM Japan wholly owned subsidiaries such as Information Technology Solutions Co., Ltd (ITS) will receive employees from Mitsubishi Motors' system operating subsidiaries. Those subsidiaries are MMC IT Solution (MITS), which is engaged in administration, distribution and management systems; MMC System Service (MSYS), which primarily handles passenger-car sales systems; and MMC Computer Research (MCOR), which works with engineering systems. Most employees of MITS and MSYS and some of the employees at MCOR will be transferred to IBM Japan subsidiaries.

Utilization of those employees will allow IBM to retain their expertise with the Mitsubishi Motors information technology system while adding the know-how in IT solutions and skills improvement of IBM Global Services.

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