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Mitsubishi shows Japan¡¯s economic woes

Posted August. 30, 2000 14:41,   


These days, Mitsubishi Motor`s cover-up of complaints filed by consumers has been heavily reported by Japanese media. They are strongly criticizing Mitsubishi, one of the leading Japanese corporations, so the controversy also has hurt the pride of Japanese people. Japanese consumers are angry about the company`s cover-up of vehicle defects over a long period of time.

Auto makers are required to offer recalls for defects and must report that to the Ministry of Transportation. However, Mitsubishi intentionally under-reported the number of complaints through a double recording system. The cover-up scheme involves many employees. Even company executives allowed the practice, saying that the corporate image could be hampered if the number of complaints were too high. The company concealed the situation for nearly 30 years. It is a striking example that shows how serious the corporate moral hazard is.

The incident was brought to public notice by a complaint by an insider, not by an investigation by the Transportation Ministry or judiciary authorities. Mitsubishi held a press conference on August 22 and acknowledged its wrongdoing.

The police investigated the company office and homes of executives. It was an earlier-than-expected investigation of the case. Also, it is almost certain that the Ministry of Transportation plans to file criminal charges against Mitsubishi based on the investigation. It will be inevitable for some Mitsubishi executives to resign. Behind the prompt investigation by the police is the agony faced by the Japanese economy. As seen in the food poisoning case of Yukijirushi Dairy, the spirit of master, the No.1 pride of Japanese corporations, is disappearing. If corporate ethics are at a low ebb in addition to this, the future of the Japanese economy isn¡¯t bright. The pressure on Mitsubishi by authorities is a sort of self-relief tactic in its own way to right the nation`s shaky economy.