Finbarr O'neill: Revving Up A New Machine

Finbarr O'Neill left Hyundai to become the CEO of Mitsubishi's American operations A year ago, Finbarr O'Neill was the auto industry's most unlikely success story. A lawyer by training and an Irishman by birth, he engineered a turnaround of Korean carmaker Hyundai that would make Lee Iacocca proud. Thanks to O'Neill's canny marketing of a 10-year warranty, Hyundai went from a punchline to a powerhouse and now outsells Volkswagen and BMW in the United States. And O'Neill had visions of catching Honda and Toyota by the end of the decade. "You no longer have to explain to your neighbors why you bought a Hyundai," O'Neill triumphantly crowed to NEWSWEEK when we featured him in our 2003 Who's Next issue.

Now O'Neill has some explaining of his own to do. He stunned the car business in September when he exited Hyundai to try to repair a car wreck over at Mitsubishi. A hot brand for Gen Y, Mitsubishi hit the skids this year after selling too many cars to kids with bad credit. As the twentysomethings defaulted on their loans, Mitsubishi drove deeply into the red. Then, when it tightened up its lending, the kids no longer qualified and sales tumbled. So why would O'Neill want to become chief fix-it man for a car company that's now smaller than Hyundai? "I'm an optimist by nature," O'Neill told NEWSWEEK in one of his first interviews since becoming Mitsubishi's American CEO. "I see a lot of upside opportunity in Mitsubishi."

The problem is that Mitsubishi hasn't hit bottom yet. Sales are down 24 percent this year, including a 39 percent plunge in November. The carmaker is pinning its hopes on a new $18,000 Galant family sedan, but it faces strong competition from Honda, Toyota and Nissan. What's worse, there's little hope of a ceasefire in the car industry's price war. The average discount per auto climbed to $2,685 in November, up 39 percent from last year. To be heard above the din of all the deals, Mitsubishi has resorted to using the tactics of late-night furniture store ads--"Zero down! Zero percent financing! Zero payments for a year!" O'Neill pledges to put an end to desperation marketing. "If all you're saying is zero-zero-zero, then you're not saying anything about the car," he says. "We need to focus on our car lines, not the deal."

Mitsubishi also needs to lose its image as a kiddie car, says O'Neill. Before he came, Mitsubishi execs bragged that they had cracked the code for selling to Gen Y. And for a while, it seemed like the best way for a rock band to score a hit single was to land a song in a Mitsubishi commercial. (A Mitsubishi Eclipse ad put the band Dirty Vegas on the map and helped it nab a Grammy nomination for the song "Days Go By.") But having learned from Mitsubishi's past error of selling to kids who couldn't afford fill-ups, never mind car payments, O'Neill is now more interested in selling to Gen Y's parents. "This is not a rock video," he says. "We don't get paid based on CD sales." Lately, middle-aged moms and dads are appearing in Mitsubishi commercials, including one that puts the kids where they belong--in the back seat watching SpongeBob SquarePants. "If you get too edgy and too young, people in their 40s and 50s might decide, 'This is not a car for me'," O'Neill says. "You don't want people thinking, 'Hey, that's just a car for kids'."

So can O'Neill engineer another amazing automotive turnaround? He certainly sounds confident, predicting that Mitsubishi will be a "tier one" car company by the end of the decade, commanding the same premium prices as Toyota and Honda. (He won't, though, make any promises about selling nearly as many cars as Toyota and Honda like he used to at Hyundai.) If he succeeds, he stands a good chance of climbing the corporate ladder at DaimlerChrysler, the German auto giant that owns a controlling stake in Mitsubishi. And if he fails, he still has his law license to fall back on. (He says he'll keep his law license current "even if it's only to argue with my wife.")

Either way, O'Neill insists his job is not the most important thing in his life. If you really want to get him revved up, ask about his daughter's soccer team, the Fusion, which was pictured with him in NEWSWEEK's Who's Next story last year. "It was a great season," he gushes. "There were only five goals scored on them all season." They did, however, lose one game, which O'Neill sees as a positive motivator. "You need a balloon punch in the stomach every now and then," he says, "so that you don't just put on the uniform and show up." On the field or on the road, it's adversity that drives Finbarr O'Neill.

Finbarr O'neill: Revving Up A New Machine | News