Japan Files Complaint Vs Mitsubishi

Friday, September 8th 2000, 12:00 am
By: News On 6

TOKYO (AP) — Mitsubishi Motors Corp. picked a new president Friday and added a DaimlerChrysler executive as second in command in an attempt to clean up its image shattered by a two-decade cover-up of auto defects.

Mitsubishi Motors President Katsuhiko Kawasoe announced he will step down effective Nov. 1 to take responsibility for the scandal that has resulted in a recall of 620,000 vehicles and a police investigation.

Takashi Sonobe, a vice president with 10 years of experience in the United States, including chairman of Mitsubishi Motors' U.S. manufacturing and sales operations, was chosen as Kawasoe's successor.

The changes at the top of the Japanese automaker came as government regulators on Friday filed a criminal complaint against the company for the cover-up.

Mitsubishi also made some changes to its deal with DaimlerChrysler, which agreed earlier this year to buy a 34 percent stake in the Japanese automaker.

The two automakers have been in talks this week to increase DaimlerChrysler's role in management, especially product quality, since the cover-up surfaced in July.

In addition to the three DaimlerChrysler executives originally slated to join the board, the German automaker will also send Rolf Eckrodt, head of DaimlerChrysler's rail system subsidiary, as chief operating officer, both sides said.

With Mitsubishi Motors stock plummeting, DaimlerChrysler is also getting 10 percent knocked off the price of 34 percent stake: $3.84 per share instead of $4.27, lowering the price from $2.1 billion to $1.9 billion.

Under the new deal, DaimlerChrysler will be able to increase its stake in Mitsubishi Motors after three years, instead of the 10 years set in the original deal.

Kawasoe said his company asked DaimlerChrysler for help in improving quality control at his company. And Sonobe, who has been key in forging the alliance with DaimlerChrysler, was picked because of his overseas experience, he added.

Eckrodt was chosen not only because of his talents but also because of his flexible personality, Kawasoe said.

The injection of Western-style management could be a godsend for battered Mitsubishi Motors, which has been embroiled in previous scandals including payoffs to racketeers at home and a sexual harassment lawsuit in the United States.

Japanese-style management is notorious for bureaucratic slow decision-making as well as for a lack of transparency, sometimes leading to ethical problems.

``It's a plus they chose a new president who knows about overseas business,'' said Kenji Tanaka, auto analyst with Okasan Securities Co. in Tokyo. ``And handing over more management say to DaimlerChrysler is going to speed up decision-making.''

Last month, Mitsubishi Motors acknowledged it had been systematically hiding thousands of consumer complaints that likely required massive recalls as far back as 1977.

None of the defects, which included failing brakes, fuel leaks and faulty clutches, has been known to cause any deaths, though several accidents in Japan have been attributed to them, and at least one accident caused whiplash in two people.

The criminal complaint Friday was largely a formality since police have already raided Mitsubishi's offices on two separate occasions in search of evidence for a criminal liability case.


On the Net:

Mitsubishi Motors Corp.: http://www.mitsubishi-motors.co.jp/inter/entrance.html