Mitsubishi Electric fails to change negative corporate culture

The Yomiuri Shimbun

13:12 JST, July 3, 2021

The recent revelation that Mitsubishi Electric Corp. engaged in fraudulent pre-shipment inspections of air-conditioning equipment and air compressors for train cars for decades highlights a corporate culture opposite of what is expected of a major manufacturer.

According to Mitsubishi Electric, employees at the company’s Nagasaki Works in Togitsu, Nagasaki Prefecture failed to conduct parts of required inspections and used fictitious data.

The long-established company is now under severe criticism for being unable to break the cycle of scandals.

Fictitious data

A computer program that automatically falsifies numerical values was used to prepare inspection reports on the capacity and power consumption of air-conditioning equipment’s cooling functions. The fact that the company continued to report falsified figures without actually testing the equipment reveals the firm’s misdirected emphasis on efficiency.

Mitsubishi Electric measured the effectiveness of the equipment’s cooling and heating functions, as well as the power consumption, under temperature and humidity conditions that were different from those agreed upon with railroad companies. Waterproofing tests were conducted under conditions different from those specified. The maker further failed to conduct dimensional inspections, and it recorded falsified data.

After the problem was discovered, the company suspended shipments of the equipment.

Mitsubishi Electric is the largest manufacturer of electrical equipment for rolling stock, including air-conditioning systems and in-car displays for trains. The company controls about 60% of the domestic market.

A senior official of an economic agency said: “Japan is selling railroad-related products and services as a package based on the concept of safety. The incident is hoped not to pose a negative impact on exports.”

Vain promise

A series of similar problems have been found at Mitsubishi Electric through in-house investigations since 2018, when a subsidiary in Matsudo, Chiba Prefecture, was found to have fabricated data on rubber products without conducting quality inspections.

Each time, the management promised to take thorough measures to prevent the problem from reoccurring, but that did not stop new findings of misconduct.

Mitsubishi Electric said in a statement at the time of the 2018 scandal that there were no safety problems, and the conduct was not something done intentionally. Some have pointed out it was difficult for frontline employees to be fully alarmed by the disgraceful development, because no fatal defects were found.

A company-wide survey on quality control conducted between 2018 and 2019 failed to uncover irregularities at the Nagasaki Works.

Labor problems have also become more serious at the company, as evidenced by a string of employee suicides due to overwork or power harassment.

At a management strategy briefing on June 3, Mitsubishi Electric President Takeshi Sugiyama said: “We have taken various measures, but have failed to implement them properly. We will work on the issue as our most important management agenda.”

However, the latest scandal was discovered immediate after these remarks.

Management problems

In recent years, there has been a string of scandals connected to quality control in the country.

In 2016, Mitsubishi Motors Corp. was found to have manipulated data to make its mini-vehicle models appear more fuel-efficient than they actually were. As the company’s earnings deteriorated in the wake of the fabrication scandal, it went under the umbrella of Nissan Motor Co.

Nissan, Suzuki Motor Corp. and Subaru Corp. were also found to have been involved in fraudulent inspections.

In 2017, Kobe Steel, Ltd. was found to have falsified inspection data on the strength of its aluminum and copper products, which were widely used in passenger cars, Shinkansen bullet trains and aircraft. The chairman and president at the time quit to take responsibility for the scandal, and the company was fined ¥100 million for falsely labeling its products in violation of the Unfair Competition Prevention Law.