Investigation: Mitsubishi Fuel-Economy Manipulation Scandal Result Of Collective Corporate Culture Failure

The recent (and ongoing) Mitsubishi fuel-economy manipulation scandal was/is the result of a collective corporate culture failure that began with management, according to those who conducted a recent investigation of practices at the company following news of the scandal.

This failure included a corporate culture where employees had no means of pushing back against management’s “unachievable” plans and demands, and where infighting and competition between different departments contributed to manipulation of test data and cheating, according to the investigators.

“The problem is not only with the testing, certification, or the development department,” stated Yoshiro Sakata, one of the investigators appointed by the company, at a recent public briefing. “It’s a collective failure of Mitsubishi Motors as a whole, starting from the management.”

Auto News continues, stating that it “was a systemic failure that led to the cheating and blame can’t be pinned on any one department, according to a panel of outside experts appointed by Mitsubishi to investigate its mileage testing practices. Among its other failings, the investigators cited a weak sense of the law, lack of unity among the rank-and-file with management, and a reluctance to acknowledge that ambitious mileage targets couldn’t be met.”

Let’s just take a quick moment to highlight one part of that: The technological key to the scamming is that ICE vehicles can’t meet fuel-economy regulations by themselves. Electrification is needed. Even up till now, minor electrification via conventional hybrid technology has been important for most automakers. Mitsubishi apparently decided to largely go another route….

Nissan CEO & Chairman Carlos Ghosn (left) with Mitsubishi Motors CEO & Chairman Osamu Masuko (right).

Back to the news: “The findings are an indictment of the leadership at Mitsubishi Motors, which restarted minicar production after a two-month suspension. The automaker is attempting to win back the consumer trust it lost in the wake of disclosures that it manipulated mileage ratings and falsified test data. The revelations have led to two top executives stepping down and a rescue from Nissan, which is completing a purchase of a 34% stake.”

Note that, on the heels of Nissan’s acquisition of a controlling stake, Nissan will be sending former executive Mitsuhiko Yamashita to Mitsubishi Motors to restructure the firm’s research and development division.

Interestingly, the company is also considering slashing the current number of management layers to facilitate better communication. Considering how excessive the middle-management layers in many companies nowadays are, and the sort of people that tend to work their way into such positions, that would likely go a long way on its own to increase communication between those making the decisions and those carrying them out.

Those behind the recent investigation have “recommended the automaker’s vehicle certification department be truly independent from research and development so as to prevent a recurrence of the misconduct. Other measures include revamping the development process, restructuring the organization, more transparency of personnel appointments and a better understanding of laws, the panel said in a handout, without being more specific.” A strong focus on electric vehicles would also be wise, given the future of society and the industry.