Mitsubishi fights back after shock

EMBATTLED Japanese carmaker Mitsubishi Motors today named a new chief executive as it sought to recover from the shock exit of major shareholder DaimlerChrysler and raise fresh capital.

The country's fourth-largest carmaker said that Yoichiro Okazaki, a long-time manager at Mitsubishi Heavy Industries, would take the reins.

He had been named as Mitsubishi Motors chairman-designate in February.

Okazaki replaces Rolf Eckrodt, who resigned earlier this week after DaimlerChrysler decided to pull the plug on its key Japanese affiliate, in which it holds a stake of 37%.

Mitsubishi's trio of major Japanese shareholders - Mitsubishi Heavy, Mitsubishi Corp and Bank of Tokyo-Mitsubishi - are attempting to agree a cash injection to turn round the loss-making firm.

Press reports suggested that they had approached Toyota Motor for funds but the talk, which lifted the ailing group's shares, was quashed by both Mitsubishi and Toyota.

DaimlerChysler boss J¸rgen Schrempp, who had championed the tie-up with Mitsubishi, has meanwhile won fresh backing from his board despite the heavy blow to the company's global ambitions from the u-turn.

The board's decision came after the company said that operating profits for the first quarter climbed 10% to $1.82bn ( £1bn), as Chrysler's US sales recovered and cost-cutting efforts started to take effect.