Mitsubishi Motors investigation blames slack governance for mileage scam

Tue Aug 2, 2016 8:39am EDT
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By Naomi Tajitsu and Tim Kelly

TOKYO (Reuters) - Poor communication, slack governance and pressure on resource-starved engineers to improve fuel efficiency at Mitsubishi Motors Corp (7211.T: Quote) were at the root of its mileage cheating scandal, an investigation concluded.

Investigators hired by Mitsubishi after the automaker admitted in April to overstating the fuel economy on its minivehicles criticized the firm for "not having the manufacturing philosophy of an automaker".

They also said in their report on Tuesday that Japan's sixth-largest automaker by vehicle sales had not rallied its workers to help get it back on track following previous scandals going back to 2000, when it revealed it had covered up customer complaints for more than two decades.

Rather, the investigators said the company had been more focused on cutting costs from 2004, when it admitted to conducting secret recalls, which squeezed the resources engine designers needed to keep the company competitive.

This meant testing engineers had an impossible task of tweaking existing engine designs to gain greater fuel efficiency, they said, adding that this led to a culture within the division where employees felt they could not speak up against unattainable targets.

"That the company did not take a united, cooperative approach to developing cars was a key factor behind the falsifications," Yoshiro Sakata, a member of the investigation team, said.

The probe was carried out by three former public prosecutors and an ex-director of Toyota Motor Corp (7203.T: Quote) after Mitsubishi admitted that two of its minivehicle models and two models manufactured for Nissan Motor Co Ltd (7201.T: Quote) had overstated fuel economy readings.

This led to a suspension of their sales for nearly three months while further revelations showed Mitsubishi used improper data to calculate mileage for other models, going back to 1991.   Continued...

Mitsubishi Motors Corp's Chairman and CEO Osamu Masuko (L) and Head of Research and Development Mitsuhiko Yamashita bow their heads to apologize over the company's mileage scandal at a news conference in Tokyo, Japan, August 2, 2016. REUTERS/Kim Kyung-Hoon