Mitsubishi Motors Gripped by Crisis.

(From Journal of Japanese Trade & Industry (JJTI))

The prestigious brand name of Mitsubishi (three diamonds) is now in crisis. In the 1970s, Mitsubishi Motors Corp. won respect for its high technology, churning out popular vehicles equipped with high-performance engines such as the Galant GTO and FTO as well as the Lancer.

Japan's largest automaker Toyota Motor Corp. has posted a net profit exceeding \1 trillion while Nissan Motor Co. also reported record-high profits, backed by a Carlos Ghosn-led managerial revolution. The strong results of these firms are dwarfing the performance of Japan's fourth-largest automaker. Under such circumstances, public attention is now focused on whether struggling Mitsubishi Motors will be able to move out of the current quagmire.

The downfall of Mitsubishi Motors has deep roots. In 1996, a U.S. federal commission filed a sexual harassment lawsuit against Mitsubishi Motors' U.S. unit on behalf of its female workers. It took three years for the company to reach a settlement with the women by paying the largest ever award for a sexual harassment case in the United States. The automaker was embroiled in a "sokaiya" corporate racketeer payoff scandal the following year. In 2000, the company was found to have systematically covered up in-house documents that indicate the need for recalls of its vehicles and complaints from its customers, forcing it to seek full support from DaimlerChrysler.

The latest blow to Mitsubishi Motors was dealt in 2002 when a wheel came off a trailer truck made by Mitsubishi Fuso Truck and Bus Corp. which was spun off from Mitsubishi Motors in January 2003. The wheel hit and killed a 29-year-old woman and injured her two younger children in Yokohama. In an apparent bid to avoid recalls of its vehicles, the automaker reported to the Ministry of Land, Infrastructure and Transport that the accident ...