Mitsubishi Motors Admits Decades-Long Defect Cover-Up
Japanese automaker adds 26 defects to four made public in 2000.
11:26 AM CDT on Wednesday, June 2, 2004
TOKYO Japan's Mitsubishi Motors hid 26 defects in its cars from regulators for years in addition to four problems it publicized in 2000 to avoid issuing recalls for the vehicles, the company said Wednesday.
The automaker said it would immediately start recalling the affected cars, estimated at over 160,000 and most of them sold in Japan.
The newly discovered problems are the latest to taint Mitsubishi since it acknowledged in 2000 that it had systematically covered up auto defects for more than two decades and issued massive recalls for the vehicles affected.
In 2000, however, Mitsubishi Motors only made public and issued recalls for four of the defects even though it had discovered about 30 of them.
A special investigative team the automaker set up last month as a part of a new revival plan disclosed the additional problems, the company said.
"We conducted a thorough probe back to 1993, the earliest possible date we could study," said Yoichiro Okazaki, the president of Mitsubishi Motors, at a hastily called news conference. "We apologize deeply for damaging public and consumer trust by failing to conduct recalls before and also for carrying them out now for problems rooted in the past."
The company said none of the defects had caused any accidents that resulted in death or property damage.
The number of newly recalled vehicles number 163,707 including 156,433 sold in Japan and 7,274 overseas, the company said. It did not give a breakdown by country outside Japan.
Mitsubishi warned the number of recalled cars could rise, and that the figures it provided were only estimates.
The company's image has been seriously battered by the recalls and the cover up that came to light in 2000.
Burdened with more than 1 trillion yen ($9 billion) in debt, plunging car sales and the recalls, Mitsubishi reported a much steeper than expected loss of 215 billion yen ($1.9 billion) for the fiscal year ended March 31.
Sales for May alone plunged 60 percent from the year earlier.
Mitsubishi also suffered when U.S.-German automaker DaimlerChrysler, after years of trying to help the company turn around, abruptly announced in April that it would not provide it with a fresh cash infusion.
Under a revival plan its chief executive described as its "last chance," Mitsubishi last month it said it would cut 22 percent of its global work force, close an assembly plant in Japan and receive a $4 billion infusion from the Mitsubishi group and other investors.
A truck unit spun off from the company in 2003 Mitsubishi Fuso Truck & Bus Corp. has also tainted by defect cover-up scandals.
Mitsubishi Fuso on Wednesday said it would cut the pay of six executives and managers as punishment their cover up of wheel and clutch defects to avoid recalls.
Twenty-three other employees of Mitsubishi Fuso were also penalized in the scandal. Four were told to stay away from work for five days and were reprimanded along with 19 other employees.
The Tokyo-based truckmaker, which is 65 percent owned by DaimlerChrysler, said in a statement that the pay cuts involved a 30 percent reduction for three months for the senior executives and a 50 percent pay cut for one day for senior managers. Mitsubishi Fuso declined to give specific figures for the pay cuts.