Insurers Reopening Mitsubishi Fusco Probes
TOKYO June 21, 2004; Yuri Kageyama writing for the AP reported that Japanese insurers said Monday they are reopening investigations into accidents involving vehicles built by Mitsubishi Motors Corp. or its truck affiliate to see if the automakers should pay claims on vehicles that have since been recalled with defects.
The Japanese automaker and truck maker have suffered a major blow in announcing a spate of recalls this year for defects it acknowledged it had hidden for years.
Tokio Marine and Fire Insurance Co., a Tokyo-based insurer that handles most Mitsubishi vehicle insurance, is investigating accidents involving Mitsubishi vehicles and may have the makers shoulder costs if their defect is found to be behind the accidents, company spokesman Shingo Kawaguchi said.
The number of cases and possible costs are still unknown, he said.
Mitsui Sumitomo Insurance Co., Sompo Japan Insurance and Aioi Insurance Co. were carrying out a similar probe, and others were expected to follow suit, company officials said. Nipponkoa Insurance Co. said it's considering such a review.
"It's a standard procedure," Sompo Japan spokesman Yasunori Okutani said.
Former and current Mitsubishi officials have been arrested on charges of professional negligence resulting in death and other offenses in two fatal accidents, in which wheel and clutch-system defects are suspected.
Fuso Mitsubishi Fuso Truck and Bus Corp. has recently acknowledged dozens of defects that could result in serious accidents. Tokyo-based Mitsubishi Fuso says the defects have caused more than 100 accidents.
The cost of insurance claims would add to the other costs of the scandal, including recall expenses and plunging sales.
Also Monday, Standard & Poor's Rating Service lowered its rating on Mitsubishi Motors' senior unsecured bonds to "CCC+" from "B-" and kept its outlook on the issue as negative.
The recent disclosure of concealed defects and the arrests linked to the fatalities "have led to further damage to MMC's already weak brand image and plummeting domestic sales," Chizuko Satsukawa, a credit analyst at Standard & Poor's, said in a statement.
Mitsubishi Motors has suffered deep losses and is trying to carry out a revival with a cash infusion from other Mitsubishi brand companies, including a machinery maker and a bank.
DaimlerChrysler's stake in the automaker is expected to fall from its current 37 percent as other investors take a larger stake. DaimlerChrysler has said it is no longer willing to put more money into the Tokyo-based automaker.
Mitsubishi Fuso, 65 percent owned by DaimlerChryslerAG of Germany, was spun off from Mitsubishi Motors last year.