Mitsubishi Motors Reaches Deal With DaimlerChrysler on Defect Cover-Up and Recall Scandal

TOKYO March 10, 2005; The AP reported that Japan's Mitsubishi Motors Corp. said Thursday that it had settled with DaimlerChrysler AG on compensation for the costly defect cover-up and recall scandal at Mitsubishi Motors' truck unit.

The deal includes a cash payment -- the amount of which was not disclosed -- and the transfer of Mitsubishi Motors' 20 percent stake in the truck company to DaimlerChrysler.

DaimlerChrysler was a key partner of the Tokyo-based automaker before deciding last year to end cash infusions to bail out the troubled company.

DaimlerChrysler has been miffed that scandals about a systematic cover-up of auto defects emerged after it took a stake in both Mitsubishi Motors and its truck unit. The scandals have recurred despite Mitsubishi Motors' promises to come clean after the wrongdoing was first disclosed in 2000.

The automaker said the settlement was already accounted for in its forecast, for the fiscal year ending March 31, of a 472 billion yen (US$4.5 billion; euro3.4 billion) loss. Mitsubishi Motors sales have plunged after the recurring recall scandals.