Exclusive: Mitsubishi Motors to hire auditor to oversee errant tech unit - sources

Fri Jun 10, 2016 6:36am EDT
 
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By Norihiko Shirouzu

TOKYO (Reuters) - Japanese automaker Mitsubishi Motors (7211.T: Quote) plans to bring in an outside auditor to monitor its technology division, blamed for at least three high-profile cheating scandals, two people familiar with the thinking of the company's leadership said.

The move, not yet formalized, would see a third-party auditor oversee major research and development and engineering processes and decisions at the company, they said.

This would partly be a response to the company's recent admission that it cheated on fuel economy tests for some models, and would be a way to "modernize" the division at a time of increasing competitive pressures in the auto industry.

"We lag behind in modernizing our tech unit," said one of the two company insiders. "We've not been able to put in place a system that could prevent cheating and irregularities."

The people declined to say who may be hired as auditor, or when this might happen.

Pressure on automakers to meet tougher fuel economy and emissions requirements, and the industry's rush to develop electric cars and autonomous driving can tempt engineers to cut corners. Volkswagen (VOWG_p.DE: Quote) admitted last year to cheating on U.S. diesel emissions tests, and Ford Motor (F.N: Quote) and Hyundai Motor (005380.KS: Quote) have previously been damaged by overstated mileage claims. Suzuki Motor (7269.T: Quote) said this week its CEO would step down and executive pay and bonuses would be cut after it cheated on some fuel economy tests.

"We need to audit aggressively and thoroughly all the engineering decisions we make and processes we take," the Mitsubishi Motor insider said. "We need to ask our engineers: did you test the technology appropriately? Did you input the data correctly and appropriately?"

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A man walks in front of an entrance of Mitsubishi Motors Corp's headquarters in Tokyo, Japan, May 13, 2016. REUTERS/Issei Kato