Mitsubishi has been in the headlines for the past several months due to decades of falsified fuel economy stats. The automaker recently funded an investigation to uncover the root of the problem, and it appears that the problem is the company itself. All of it.
No stranger to scandals, Mitsubishi's latest fiasco became big news in April, when the automaker announced that roughly 600,000 of the vehicles it produced for the Japanese market--most of which were built for Nissan--failed to comply with Japan's fuel efficiency testing guidelines.
Shortly afterward, the company revealed that the problem was more widespread--far more widespread. In fact, chances were good that no Mitsubishi vehicles produced after 1990 met their stated fuel economy. Mitsubishi's value plummeted, its president and COO stepped down, and Nissan swept in to take a controlling stake in the company.
Though that sounds pretty bad, it might not be half as bad as the company deserved. An investigation that was conducted by outside analysts and funded by Mitsubishi has now revealed that its illegal practices were fostered by a corporate culture that had little respect for Japanese law, enabled fighting between departments, prevented workers from airing grievances with management, and refused to dial back sky-high fuel economy goals when confronted with real-world limitations.
As if often the case in situations like this, investigators lay the lion's share of blame on management. Recommendations going forward include streamlining Mitsubishi's management team to facilitate the flow of communication up and down the chain of command; separating the development and certification teams to avoid conflicts of interest; and improving employees' understanding of the law.
Will Mitsubishi recover from the scandal? Nissan thinks so. In fact, Mitsubishi's new owner is betting that the bad press can be largely confined to Japan, allowing Nissan to boost sales in Southeast Asia, where Mitsubishi holds greater market share. Stay tuned.