DaimlerChrysler Vs. Mitsubishi In Court?

FRANKFURT, June 18, 2004; Reuters reported that DaimlerChrysler has played down any immediate prospect of suing Asian partner Mitsubishi Motors Corp over quality problems at its Japanese truck and bus unit, the Financial Times reported on Friday.

The German-American car maker had said earlier this month it was considering filing damage claims against Japan's fourth-largest automaker in light of vehicle defects that were covered up by unlisted Mitsubishi Fuso Truck and Bus Corp.

But the newspaper quoted Ruediger Grube, DaimlerChrysler's head of corporate development, as saying such a lawsuit was "not yet filed, rather we are working at the moment on addressing the Fuso quality problems".

The suit, if it goes ahead, could deepen the financial woes of cash-strapped MMC, which faces an uphill path to recovery after 37 percent-owner DaimlerChrysler suddenly pulled the plug on a financial aid package in April.

DaimlerChrysler owns 65 percent of Fuso after paying 52 billion yen ($474 million) this year for a bigger stake in the firm, once Mitsubishi Motors' crown jewel, on top of $768 million it had spent initially for a 43 percent stake.

Fuso, which Mitsubishi Motors spun off in January 2003, has been dogged by bad publicity after revelations that it had been hiding dangerous defects from the authorities.

Subsequent product recalls have alienated drivers and put a big dent in domestic sales, which MMC said last week could fall 80,000 units short of its 300,000-unit target this fiscal year.