Mitsubishi Fuso Reveals More Truck Defects

TOKYO June 8, 2004; Audrey McAvoy writing for the AP reported that Mitsubishi Fuso Truck & Bus Corp. on Tuesday disclosed an additional 93 vehicle defects based on an investigation going back to 1992, including some that reportedly caused 21 accidents resulting in injury.

The latest revelation comes as Mitsubishi Fuso tries to re-establish its credibility after acknowledging last month that officials had covered up wheel and clutch defects suspected of causing two fatal accidents. Prosecutors have charged former executives and current officials in those cases.

Mitsubishi Fuso said the defects included "a number" which should have prompted recalls. The truck maker was investigating how many vehicles it would recall based on the latest problems.

Last week, Mitsubishi Motors Corp. -- which spun off Mitsubishi Fuso in 2003 -- acknowledged it had failed to disclose all known defects in 2000, when it admitted to systematically covering up problems to avoid costly recalls.

Mitsubishi Fuso, which is 65 percent owned by German-American automaker DaimlerChrysler, said in a statement that some of the additional 93 defects resulted in accidents causing injuries but did not disclose the type or number of injuries. It said it would provide more details next Tuesday.

The Asahi newspaper and other Japanese media, however, reported the newly disclosed defects caused 21 accidents resulting in injury.

Meanwhile, DaimlerChrysler said it was considering filing a claim for compensation against Mitsubishi Motors, which still owns 20 percent of Mitsubishi Fuso.

"We are investigating the possibility of a legal claim," DaimlerChrysler spokesman Othmar Stein said from Germany. "It's in the interest of our shareholders to examine our rights under Japanese law."

No decision has been made on whether to file a claim, he added.

Mitsubishi Motors said DaimlerChrysler is considering demanding compensation from the carmaker over Mitsubishi Fuso's "quality problems."

DaimlerChrysler informed Mitsubishi Motors it is mulling the option based on the sales contract the two automakers signed for the truck maker's shares.

DaimlerChrysler said it was considering filing a claim for compensation against Mitsubishi Motors Corp.

"We are investigating the possibility of a legal claim," spokesman Othmar Stein said. "It's in the interest of our shareholders to examine our rights under Japanese law."

No decision has been made on whether to file a claim, he added.

DaimlerChrysler is still a major shareholder of Mitsubishi Motors, but said in April it would not provide fresh financing to the troubled Japanese automaker.

The latest news on truck defects coincided with an announcement by Japan's Transport Ministry that Mitsubishi Motors and Mitsubishi Fuso would be required to report weekly to authorities about their investigations into vehicle defects.

"It is an undeniable fact that problems at Mitsubishi seem to keep cropping up one after another," said Transport Minister Nobuteru Ishihara.

As a part of an effort to prevent further coverups in the industry, the ministry also said it would require all automakers to report to the ministry four times a year about serious defects in their vehicles and on accidents believed to have been caused by defects.

Separately, Mitsubishi Motors said Tuesday it will issue an extra 15 billion yen ($136 million) in preferred shares to Mitsubishi group companies as part of its revival plan, in addition to the 280 billion yen ($2.54 billion) preferred share issue announced on May 21.

The automaker is also issuing common stock to Phoenix Capital, an investment firm affiliated with the Mitsubishi group, and to J.P. Morgan Securities.

Once the plan is completed, DaimlerChrysler's stake in Mitsubishi Motors will be reduced from 37 percent to 22 percent or 23 percent, but alliance projects will continue, such as the joint development of small cars and engines.