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Mitsubishi Electric CEO Quits Following Latest Air Conditioning Scandal

The Australian subsidiaries of Mitsubishi Electric have not said what impact the global quality control scandal will have in Australia, after the Companies President and CEO Takeshi Sugiyama quit at the weekend following the exposure of new quality control cover ups.

His sudden exit follows revelations that the company used a computer program to fake inspection results of Mitsubishi products going back as far as 1980 and following several “so called” reviews of previous complaints which now appear to have been “swept under the carpet” according to one insider

Now questions are being raised about the overall management of the Japanese Company whose management style has been described to ChannelNews as being in the “dark ages”.

See original story here. 

Mitsubishi President and CEO Takeshi Sugiyama

At a press conference to announce his sudden departure Sugiyama said, “I am keenly aware of my responsibility for damaging trust,”.

The cheating was uncovered by an internal probe and has been described as “systematic wrongdoing.”

The company now claims that they are looking for a new CEO who some observers claim will have no alternative but to totally restructure the Company.

The news conference followed two days of revelations of faked inspection data, first for air-conditioning equipment and then air compressors used in train brakes.

New revelations reveal that a Mitsubishi Electric factory introduced the program in an apparent effort to avoid the time-consuming process of having to conduct tests on air conditioning units.

The software allowed the Company the assess the cooling performance and power consumption of their air conditioners, and when a unit that did not comply the software automatically adjusted the data to make it match the desired result.

Mitsubishi Electric then issued approved inspection certificates to clients.

Observers claim the latest revelation is proof that the company was systemically involved in fraudulent inspections over a long period of time.

Mitsubishi Electric now plans to set up an investigative committee, which will include an external lawyer, to look into whether similar misconduct in have been taking place in other subsidiaries.

Nikki Asia claims that the quality control scandal deals a blow to the reputation of an industrial group that produced Japan’s first integrated circuit chip in the 1960s and today supplies technology for products including refrigerators, air conditioning units as well as factory robots, military radar and satellites as well as trains for the NSW Government.

Japan’s minister for economy, trade and industry, Hiroshi Kajiyama, told reporters at separate news conference the revelations were “very unfortunate” and could “do great damage to the trust in Japanese manufacturing.”

About 84,600 air conditioners and 1,500 air compressors may have been involved in the falsified tests.

A survey of 160 employees at a factory in Nagasaki Prefecture, where the improper inspections were carried out, revealed that senior managers in the quality control and design departments were aware of what was going on.

When asked about issues with the company’s culture, Sugiyama said: “We weren’t able to learn from what happened, and departments couldn’t work together effectively.”

The company discovered the faked inspections on June 14 following an internal investigation and reported the problem to the industry ministry shortly thereafter, it did not inform shareholders at its annual general meeting last week.

The board “concluded that it would not be appropriate to cause unease by talking about it” before it had been properly investigated, Sugi claimed.

The scandal could affect millions of dollars’ worth of rolling stock currently being delivered for the NSW Government.

The NSW, Intercity Fleet is a $2.3 billion NSW Government project to replace trains carrying customers from Sydney to the Central Coast, Newcastle, the Blue Mountains and the South Coast.

RailConnect NSW is an unincorporated joint venture between Hyundai Rotem Company, UGL Limited and Mitsubishi Electric Australia.

RailConnect is building more than 500 carriages, with the first trains delivered by 2019 and the rest of the fleet being delivered progressively through to 2022.

At this stage it’s not known whether this fleet is affected by the recent disclosures in Japan.

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