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The fraud involving product quality data at Mitsubishi Electric Corp. runs far too deep. To absolutely prevent a recurrence, the leadership needs to be prepared to fundamentally change their corporate culture and start from scratch.
The fraud involving product quality data at Mitsubishi Electric Corp. runs far too deep. To absolutely prevent a recurrence, the leadership needs to be prepared to fundamentally change their corporate culture and start from scratch.
Mitsubishi Electric has released the final report from an investigation panel of outside experts, including lawyers, into irregularities in quality inspections and other matters. Since its release of the results of the last investigation in May this year, 70 more cases of misconduct have been uncovered at 11 manufacturing sites.
The company has been investigating the fraud scandal since June last year, when it was discovered that there had been fraudulent inspections of air conditioning equipment for railroads at its Nagasaki plant. It is the fourth report in the investigation.
This means that a total of 197 cases of misconduct have been found at 17 of Mitsubishi Electric’s 22 manufacturing bases in Japan, or nearly 80% of the total. It is extremely unusual that fraud has become the norm on such a large scale at one of the nation’s leading electronics manufacturers.
The final report pointed out that the wrongdoing was caused by a misconception that “it is acceptable as long as there are no substantial quality problems.” Among the 197 cases of misconduct identified, 112 cases were committed intentionally, while 62 cases involved people in managerial posts.
Moreover, it is a serious situation that in some cases, misconduct continued even after the external investigation began.
At its Himeji plant in Hyogo Prefecture, fraudulent acts such as changing numerical values in an audit by a certification body for auto parts continued until August this year.
At the Ako plant in the same prefecture, falsification of data in transformer tests continued until this spring. From 2018 to 2022, employees and others often told their superiors that they wanted to stop the fraudulent practice, but management did not take corrective action, according to the final report.
At a press conference, President Kei Uruma said, “I was not serious enough as a manager.” He must take seriously his responsibility in having overlooked the situation even after he became president in July last year.
Masaki Sakuyama, who served as Mitsubishi Electric’s president and chairman and resigned from the chairman’s post last year, himself led the practice of reporting values to customers that were not actually measured during performance tests around 1992, when he was a section chief at a plant to produce generators. This shows the depth of the fraud.
Mitsubishi Electric said this is the end of the external investigation. But it cannot be said that the company has lanced the boil. It should root out the corruption.
There has been a spate of other scandals at Mitsubishi Electric as well, including suicides of employees due to overwork or power harassment. The current management’s ability to execute reforms under its strong leadership is being tested, including changing the closed corporate culture of top-down, bureaucratic communication that was cited as a factor in the quality data fraud.
There is no end to irregularities regarding quality testing in the domestic manufacturing industry. Fraud related to product quality data was also recently found at major truck manufacturer Hino Motors Ltd. It is hoped that other companies will also continue to make efforts to identify problems through closer communication between management and the manufacturing floor.
