Ex-Idaho Power Broker Overcomes Culture Clash Globe-Trotting Michael Mallinen Makes A Mark In Japanese Company

As the first non-Japanese director of a huge Toyko-based engineering firm, Hayden Lake’s Michael Mallinen finds himself up close with a sharply different business culture from the one he left here last year.

But nothing’s too foreign for Mallinen, who has made a name for himself hopscotching the globe in search of investments in power plants.

For most of this decade, Mallinen headed Power International Inc. in Coeur d’Alene, a fast-growing power plant engineering and brokering firm with offices in the Czech Republic and around the globe.

The company’s success attracted the attention of a large Cincinnati utility, which bought its assets in 1994, only to dismantle the company a year later.

The end of Power International merely opened new doors for Mallinen, who became a sought-after player in the power-investment game. Japanese giant Chiyoda Corp. hired him to head its international power projects division.

The Idaho native is no ordinary engineer. He combines business acumen with political and environmental savvy to handle all sides of deals involving large power plants.

“I think having all of those skills is what separates me in this business,” Mallinen said in a telephone interview from Toyko. Chiyoda looked at 100 candidates from around the world before settling on him, he said.

He handpicked his division’s team of about 40 - including some from the former Power International. Beyond his core team, Mallinen can rely on Chiyoda’s 6,000 engineers to help evaluate power projects worldwide.

There are two power markets Mallinen cultivates.

The first lies primarily in Southeast Asia, India and China, where exploding growth has accelerated the demand for new power plants.

The second lies in the former Soviet states and Eastern European countries. There, the centrally planned economies have aging, pollution-belching plants that need hundreds of millions of dollars’ worth of retrofitting to meet new environmental standards.

Chiyoda seems poised to play a large role in how the power systems of tomorrow will be built and financed. Like most Japanese giants, Chiyoda has more than $1 billion in cash reserves and can loan money at outrageously low interest rates compared with domestic companies, Mallinen said.

“Japan has really been the fuel behind the development of Asia,” he said. “Japanese companies are feeling more comfortable in high-risk environments than their (Western) counterparts.”

Toyko’s business culture is centralized, meaning that every decision made by the largest companies emanates from Toyko headquarters, even if a company has thousands of offices around the world, he said.

Chiyoda’s corporate culture has taken some getting used to, but Mallinen generally has the freedom to make decisions for his group and move as aggressively as he sees fit.

“Chiyoda saw that this business was a Western business and that they needed to bring in an outsider,” he said.

Many large investor-owned American utilities have been buying other overseas power plants because the domestic power grid has few new investment opportunities. The return on international projects allowed the companies to post attractive growth rates.

Mallinen capitalized on this trend at Power International. His success with the firm attracted CINergy the merger of Cincinnati Gas & Electric and a large Indiana utility - to buy the assets of the firm.

But CINergy lost its enthusiasm for international investment, and relocated the company to Cincinnati, putting Mallinen and dozens in Coeur d’Alene out of work. Mallinen sued, and he and CINergy continue to negotiate a settlement.

Mallinen prefers to dwell on the future of the international energy market. Power is not an industry that “goes out of style,” he said.

His most current project lies in Hong Kong, which is a year away from reverting to Chinese control. Though Chiyoda’s Asian markets will dominate new power generation on a global basis, Mallinen sees his Eastern Europe and Soviet Republic markets equally as promising for the company.

Mallinen has spent many long flights from Toyko to Washington, D.C., to help set up a $1 billion fund for low-cost loans to help rebuild the Eastern European power infrastructure.

Despite his global focus, Mallinen continues to think often about North Idaho, where he maintains his home and where his wife, Elizabeth, still lives and commutes more than a half-dozen times each year to Toyko to see him.

Mallinen’s work in the Czech Republic involved getting the government, environmentalists and investors together on a privatization plan that would help make their power plants run clean.

While teamwork was important to the process, true leadership made the deals work, Mallinen said. That means getting above the special interests to find out what the true priorities are in a situation and taking the group there.

“That has a lot of applications back in North Idaho with the grass burning issue,” he said. “People need to get beyond what the special interests want to find out what is really the best course for the future.”

Mallinen’s leadership potential recently won him the Outstanding Young Idahoan award from the Idaho Junior Chamber of Commerce. Previous winners included J.R. Simplot.

“More importantly, I think, is that the award went to a North Idahoan,” Mallinen said. “Southern Idaho seems to get most of these things.”

, DataTimes ILLUSTRATION: Photo