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Mitsubishi scandal probe blames unrealistic goals for data falsification

Clare Goldsberry

August 3, 2016

5 Min Read
Mitsubishi scandal probe blames unrealistic goals for data falsification

Image courtesy Jomphong/
freedigitalphotos.net.

Here we are again: Another week, another automotive scandal related to mileage falsification data. Does anyone see a pattern here? First it was Volkswagen’s diesel cars that couldn’t really pass emissions tests because of test-cheating software installed in the vehicles.

This week, it’s Mitsubishi Motors Corp. A group of lawyers asked by Mitsubishi to investigate mileage cheating at the Japanese automaker found a divided company that had set unrealistic goals, to which employees simply couldn’t say, “no,” according to an AP report.

The Tokyo-based automaker acknowledged in April it had systematically falsified mileage data on its eK wagon and eK Space minicars, also produced for Nissan Motor Co. The investigative panel said Tuesday such data falsifying went on for 25 years, and the wrongdoing was systematic and extensive, and that it escalated over time.

The probe, which included interviews with more than 150 people, found the company lacked a system for checking on the team assigned to improve mileage. The company said employees did not feel compelled to respect the law or fix the wrongdoing and that each department was concerned only with its own performance.

“There was utterly no consciousness that the company must work as one to make and sell cars,” the panel’s 37-page report said. The government earlier found Mitsubishi had overstated mileage on its vehicles by up to 16%. 

Mitsubishi Motors, which makes the Outlander sport-utility vehicle and the i-MiEV electric car, struggled for years to win back consumer trust after a scandal in the early 2000s over cover-ups of problems, some dating back to the 1970s, that included failing brakes, faulty clutches and fuel tanks that were prone to falling off. Panel members, speaking at a news conference at the company’s Tokyo headquarters, acknowledged their recommendations might not be followed, just as with past scandals.

Shortly after the problems were made public, Nissan announced it was taking a 34% stake in Mitsubishi to help its turn-around. The scandal surfaced after Nissan, which sold Mitsubishi minicars under its own brand, did its own tests and pointed out inconsistencies in data.

Mitsubishi has said it didn’t lie about mileage on models sold overseas. The company is offering a cash rebate to customers in Japan who bought the vehicles, for which it had reported inflated mileage, to make up for the extra gas.

Mitsubishi Chairman Osamu Masuko, who helped engineer the Nissan deal, reiterated an apology and promised the company would penalize managers found responsible for the cheating. “We hope this will mark a new beginning for us as a manufacturer,” he told reporters after the panel’s findings were released.

A recent article by Plante Moran’s Partner Daron Gifford in MarketWatch noted that, while VW and its 9,000 suppliers "might want to put the ‘Dieselgate’ scandal in the rearview mirror,” even the “recently announced $15 billion settlement with U.S. federal regulators won’t allow the VW supply chain to turn the corner." Gifford noted that there is "still enormous uncertainty surrounding the ultimate cost of the scandal" and what will have to be done with the huge number of cars VW may have to scrap if they can’t find a fix for them.

VW’s Chief Executive Matthias Muller insists VW won’t mention the issue to its suppliers or ask them to lower their prices, but this assertion doesn’t ring true. If Volkswagen has to shell out $15 billion in the United States, regulators may seek a similar amount for European consumers. There would be little doubt that VW will have to ask suppliers to shoulder some of the burden by cutting billions in costs for future programs, wrote Gifford.

"One supplier in particular could be hit hard: Privately held Robert Bosch GmbH, which made emission system parts for the Volkswagen diesel cars,” said Gifford. "Prosecutors in Stuttgart are investigating if employees at Bosch, the world’s biggest automotive supplier by sales, helped Volkswagen in its emissions cheating," said Gifford.

It appears obvious that suppliers will feel some pain as a result of these scandals. Even GM announced not long ago that suppliers would be asked to share in the cost of recalls, regardless of whether or not their component was the cause of the recall.

The VW and Mitsubishi scandals are both connected to the Corporate Average Fuel Economy (CAFE) standards and the efforts to reduce emissions that some scientists say contribute to global warming or climate change, in spite of the fact that vehicles produce fewer than 2% of greenhouse gas emissions. The new mileage goals are unreachable at best and if you listen to various presentations given at automotive conferences, you soon realize that very few suppliers or even the industry itself believe this goal is possible.

They will tell you, off the record, that the 54+ mpg mandate is beyond the reach of any technology and is in no way realistic. A few brave souls will actually admit openly in so many words that the CAFE standards are a farce.

Automotive OEMs are eager to please and want the mileage goals to be realistic; they want to prove that their vehicles are “green” and capable of saving the planet. But deep down, they know that it’s most likely a fairy tale of huge proportions to believe that it’s possible, and so they create the myth to uphold the unreality of what is truly possible. For that they are willing to pay the price, and to throw their suppliers under the bus.

About the Author(s)

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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