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Mitsubishi Apologizes for Defect Cover-Ups

Oct 26, 2004 | American International Automobile Dealers Association

Scandal-plagued Mitsubishi Motors Corp. spent more time apologizing for defect cover-ups and promising better quality at a media event to unveil a new model Monday, the first vehicle launch under new management.

In the last several months, the Japanese automaker has announced more than 40 recalls after carrying out an investigation into the company’s systematic recall cover-up scam that extended back as far as 25 years.

The scandal emerged although Mitsubishi Motors had acknowledged a cover-up in 2000 and promised to come clean. And it has badly tarnished the automaker’s image and sent car sales plunging.

With the introduction of the Colt Plus, Mitsubishi officials said they hoped to put the scandal behind them.

"We have been bracing the cold wind, and we could barely keep standing, but the Colt Plus is our first step forward," said Hideyasu Tagaya, who became president in June to lead a turnaround.

What is usually a celebratory gala event for other automakers in this nation included an unusual, lengthy explanation about how the new Colt Plus had gone through strict monitoring for quality problems.

At model unveilings for Toyota Motor Corp., Honda Motor Co. and other Japanese automakers, the new car is paraded under flashy lights, sometimes with fashion models and loud film footage, while executives boast about its sleek design and innovative technology.

In contrast, Tagaya bowed deeply at the automaker’s Tokyo headquarters during his presentation to apologize for the scandal and acknowledged the launch of the remodeled Colt had to be delayed for a month to take care of the recall problems first.

Tagaya said the overall vehicle sales drop in Japan was not as bad as the company had expected, at slightly better than half of last year’s sales in recent months.

He said the company will maintain its Japan sales target of 220,000 vehicles for the fiscal year ending March 31, 2005, down 39 percent from the previous year. Mitsubishi Motors is planning to sell 4,000 of the Colt models a month in Japan.

But the problems are far from over for Mitsubishi Motors.

The former president of Mitsubishi Motors and the former chairman of its truck unit have been charged in two fatal accidents suspected of being caused by defects in Mitsubishi trucks. Their trials are ongoing. Both have pleaded innocent.

In one accident, a wheel fell off a Mitsubishi truck and crushed a pedestrian. In another, the brakes failed on a Mitsubishi truck and the driver died after crashing into an embankment.

Thousands of Mitsubishi trucks were recalled this year for defects in the wheel design that caused cracks in wheel parts, as well as in the clutch-system that the automaker said may cause brake failure.

Mitsubishi Motors, which has tackled one revival plan after another in recent years with dubious results, is about 20 percent owned by DaimlerChrysler AG of Germany.

DaimlerChrysler has a 65 percent stake in Mitsubishi Fuso Truck and Bus Corp., which was spun off from Mitsubishi Motors as a truck-maker.

In April, DaimlerChrysler announced it was stopping further financial help for Mitsubishi Motors. Other investors, including a bank and other companies in the powerful Mitsubishi conglomerate, are providing assistance so the automaker will survive.

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