Mitsubishi admits to hiding defects

AP Katsuhiko Kawasoe, president of Mitsubishi Motor Corp., admits that the automaker had systematically concealed owners' complaints that should have been submitted to the government.

Managers and workers routinely shelved dozens of customer complaints as far back as 1977 that would have required massive recalls, coding them as "H," short for the Japanese word for "secret" or "defer," the company said.

In order to avert recalls, Mitsubishi contacted owners through dealers and fixed the problems without reporting them to the authorities. Problems included failing brakes, fuel leaks, malfunctioning clutches and fuel tanks prone to falling off.

Mitsubishi Motors president Katsuhiko Kawasoe denied any personal knowledge, saying he had been stunned to learn about the cover-ups from the company's internal investigation submitted to the government Tuesday.

The Transportation Ministry said it was studying possible penalties. It was clear that Mitsubishi purposely delayed recalls and hid problems as company policy, the ministry said.

The Japanese automaker announced recalls Tuesday based on eight defects in 88,000 trucks and cars. Those were in addition to recalls announced last month on 532,000 vehicles.

The recalls will affect about 50,000 vehicles exported to the United States. Mitsubishi said the U.S. recalls involve leaking brake fluid in the Montero sport-utility vehicle, a chassis joint that may come loose in the Galant sedan and an engine shaft that may come loose in the Mirage compact.

The recalls will cost Mitsubishi $69 million. More significantly, the scandal is certain to hurt Mitsubishi at a time when it is trying to revive lagging sales with international alliances with German-American automaker DaimlerChrysler and Sweden's Volvo AB.

Last month, DaimlerChrysler sealed a pact announced in March to gain a 34 percent share in Mitsubishi. Mitsubishi forged the alliance with Volvo in its truck division last year.

"It's definitely another problem for Mitsubishi Motors," said Noriyuki Matsushima, an auto analyst with Nikko Salomon Smith Barney in Tokyo. "It can hope to win back social credibility once it takes proper steps for its mistakes."

Mr. Kawasoe, who took over the automaker after a 1997 scandal involving payoffs to racketeers, promised further changes.

A panel with outsiders to monitor product quality will be set up next month, and executives will take pay cuts, although there will be no firings or resignations, he said.

"We sincerely apologize to the drivers of our cars," Mr. Kawasoe said. "My job is to work to regain the public's trust in this company."

Mr. Kawasoe denied that Mitsubishi had been sloppy about safety.

"The cars were running every day, and we dealt with the problems as they came up," he said.

Tatsuro Nakagami, executive officer in charge of product quality, said he knew of the cover-ups, which totaled three or four a year, but did not realize they were illegal.

The defects caused three accidents in Japan. Two were minor crashes, but a brake defect in a Mitsubishi Pajero, sold as the Montero in the United States, caused it to crash into the rear of another car in June, injuring two, Mitsubishi said.