- The Washington Times - Wednesday, August 23, 2000

TOKYO Mitsubishi Motors Corp. knowingly and systematically neglected to recall defective autos for more than 20 years, the automaker's president said yesterday as the company announced another recall.
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, first reported by a Japanese newspaper last week and submitted to the government yesterday.
The recall announced yesterday affects 88,000 cars and trucks, half of them in the United States.
In documents submitted to the government, the automaker said the practice dated back to 1977 and was carried out with the full knowledge of workers, managers and even one current board member.
The revelation is a blow to the struggling automaker, which is likely to face an uphill battle regaining consumers' shattered faith in its ethics and the quality of its vehicles. Last month, the heavily indebted automaker signed a deal to sell German-American DaimlerChrysler a 34 percent stake.
"It's definitely another problem for Mitsubishi Motors," said Noriyuki Matsushima, auto analyst with Nikko Salomon Smith Barney in Tokyo. "It can hope to win back social credibility once it takes proper steps to rectify its mistakes."
The recalls announced yesterday by Mitsubishi are based on eight defects and supplement recalls announced last month on 532,000 vehicles.
The latest recalls cover about 45,000 vehicles exported to the United States. Brakes may fail in the Montero sport utility vehicle because of leaking brake fluid, a gas-tank weld may come loose in the Galant sedan and the Mirage may stall out because of a defective engine shaft.
Mitsubishi Motors America spokesman Kim Custer said the U.S. complaint system was separate from the one used in Japan. The U.S. sales arm had previously conducted several of the recalls that its Japanese parent is now authorizing domestically, he said.
At a time when Mitsubishi is struggling to turn around lagging sales, the recalls will cost it $69 million.
For the fiscal year ending in March, Mitsubishi posted $213 million in losses. The company had gone into the black in the previous fiscal year, but posted a loss of $940 million in fiscal 1997, when auto demand slumped at home and the rest of Asia.
Ironically, when Mr. Kawasoe took over as president three years ago, he promised to clean up Mitsubishi. His predecessor resigned to take responsibility for a scandal involving payoffs to racketeers.
Mr. Kawasoe denied personal knowledge of the cover-up of defects and refused to resign. He promised further reforms a panel with outsiders to monitor product quality, and executive pay cuts.
Tatsuro Nakagami, executive officer in charge of product quality, said he knew of the "H" file, which included data on three or four potential recalls a year, but did not realize that the policy was illegal. There have been various reports from Mitsubishi officials about what the "H" stood for: "hikoukai," which means to conceal; "himitsu," or secret; or "horyu," or defer.
The Transportation Ministry accused Mitsubishi of systemically hiding defects as a policy and said it was studying possible penalties.
The cover-ups surfaced in a recent government inspection, when officials found batches of documents about driver complaints that they had never seen before, stashed away in a Mitsubishi locker room.
Although no accidents linked to the defects have been reported abroad, there were at least three in Japan, Mitsubishi said.
Two were minor crashes without injury, 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. Two persons in the front car suffered minor whiplash, and Mitsubishi is looking into possible compensation.
"The problem was the lack of conscience among our employees," Mr. Kawasoe said. "There was an impression that recalls meant we were making shoddy cars."

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