Mitsubishi Electric CEO resigns after latest air conditioning scandal

Mitsubishi Electric’s Australian subsidiaries have not clarified what impact the global quality control scandal would have in Australia, after the departure of company president and CEO Takeshi Sugiyama over the weekend following the news revelation. quality control cover-ups.

Its sudden exit follows revelations that the company used a computer program to falsify inspection results for Mitsubishi products dating back to 1980 and following several “so-called” reviews of previous complaints that now appear to have been “swept under the carpet” according to an insider

Now questions arise about the overall management of the Japanese company, whose management style has been described to ChannelNews as being in the “dark ages”.

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Mitsubishi Chairman and CEO Takeshi Sugiyama

At a press conference to announce his sudden departure, Sugiyama said: “I am fully aware of my responsibility for damaging trust.”

The cheating was discovered by an internal probe and has been described as “systematic wrongdoing”.

The company now says it is looking for a new CEO who some observers will have no choice but to completely restructure the company.

The press conference followed two days of revelations of false inspection data, first for air conditioning equipment and then for air compressors used in train brakes.

New revelations reveal that a Mitsubishi Electric factory introduced the program in an apparent effort to avoid the tedious process of having to perform tests on air conditioning units.

The software allowed the company to assess the cooling performance and power consumption of their air conditioners, and when a unit did not comply, the software automatically adjusted the data to match the desired result.

Mitsubishi Electric then issued approved inspection certificates to customers.

Observers say the latest revelation is evidence that the company has been systematically involved in fraudulent inspections over a long period of time.

Mitsubishi Electric is now considering setting up an investigative committee, which will include an outside lawyer, to determine whether similar misconduct has occurred in other subsidiaries.

Nikki Asia says the quality control scandal is damaging the reputation of an industrial group that produced Japan’s first integrated circuit chip in the 1960s and today provides technology for products such as refrigerators, air conditioners as well as factory robots, military radars and satellites. as well as trains for the NSW government.

Japanese Economy, Trade and Industry Minister Hiroshi Kajiyama told reporters at a separate press conference that the revelations were “very unfortunate” and could “seriously damage confidence in manufacturing Japanese ”.

About 84,600 air conditioners and 1,500 air compressors may have been involved in the falsified tests.

A survey of 160 employees at a factory in Nagasaki Prefecture, where improper inspections were carried out, found that senior quality control and design officials were aware of what was going on.

Asked about the issues related to the culture of the company, Sugiyama said, “We have not been able to learn from what has happened and the departments have not been able to work together effectively. “

The company discovered the rigged inspections on June 14 following an internal investigation and reported the issue to the Industry Ministry soon after, failing to notify shareholders at its annual general meeting that week. last.

The council “concluded that it would not be appropriate to cause discomfort by talking about it” until it was properly investigated, Sugi said.

The scandal could affect millions of dollars in rolling stock currently delivered to the NSW government.

The NSW, Intercity Fleet is a $ 2.3 billion NSW government project to replace trains carrying customers from Sydney to the Central Coast, Newcastle, the Blue Mountains and the South Coast.

RailConnect NSW is an unincorporated joint venture between Hyundai Rotem Company, UGL Limited and Mitsubishi Electric Australia.

RailConnect builds more than 500 cars, with the first trains being delivered by 2019 and the rest of the fleet being delivered gradually until 2022.

At this stage, it is not known if this fleet is affected by the recent revelations in Japan.

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