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Mitsubishi HQ raided by the Japanese government

Mitsubishi's fuel economy scandal continues to grow, and the Japanese government wants answers. According to Reuters, the Japanese Transport Ministry raided the company's headquarters and a factory in Nagoya today. This raid comes soon after the company revealed that a number of its SUVs were also being sold with incorrect fuel economy ratings. The Japanese government issued a stop-sale on those vehicles a few days ago. This raid also follows an internal investigation conducted by Mitsubishi to discover how this fuel economy scandal happened, and how the practices that led to it were able to continue for 25 years. The internal investigation revealed a few contributing factors that all fell under issues with the company's culture. There was significant pressure throughout the company to reach fuel economy targets and missing them wasn't readily accepted. Questioning decisions of management was also discouraged, and it seemed the different divisions of the company weren't working well together. The findings of this raid have yet to be revealed, but it will be interesting to see how they compare with those of the internal investigation. The Japanese Transport Ministry seems intent on preventing a repeat of this with another company considering that, according to Reuters, it "sent documents to other automakers to enforce compliance with rules for calculating mileage ." Related Video: News Source: Reuters via Automotive News EuropeImage Credit: Julien Amado / Autoblog Quebec Government/Legal Green Mitsubishi Fuel Efficiency investigation

Mitsubishi expects a massive loss this year due to the coronavirus pandemic

TOKYO — Mitsubishi Motors reported Monday a $1.7 billion (176 billion yen) loss for April-June, and forecast more red ink for the fiscal year, as the coronavirus pandemic slammed auto demand around the world. The Japanese automaker had posted a profit of 9.3 billion yen for the fiscal first quarter the previous year. Quarterly sales shrank 57% to $2.2 billion (229.5 billion yen). The maker of the Outlander sport utility vehicle and I-MiEV electric car expects to chalk up a $3.4 billion (360 billion yen) loss for the fiscal year through March 2021, because of the fallout from the outbreak. This would be MitsubishiÂ’s biggest loss in at least 18 years, according to company financial records dating back to 2002. “To pave the way to recovery, the top priority of all executives is to share a sense of crisis with employees to execute cost reductions,” Chief Executive Takeo Kato told reporters. The shaky results come as Mitsubishi MotorsÂ’ alliance partners Nissan and Renault of France work to recover from the downfall of their former chairman, Carlos Ghosn. Ghosn was out on bail, awaiting trial on various financial misconduct allegations in Tokyo, when he fled late last year to Lebanon. He has said he is innocent of the allegations of under-reporting future compensation and breach of trust. Mitsubishi Motors has denounced Ghosn. Mitsubishi officials, in a news conference relayed in a call to reporters, promised a turnaround, pursuing growth in Southeast Asian markets, where its profitability is relatively strong, and building on its strength in four-wheel drive and “off road performance.” They said they expect the companyÂ’s results to recover next fiscal year, once COVID-19 is brought under control. Product development will leverage “synergies” with alliance partners, and labor costs will be cut through pay cuts, hiring freezes and voluntary retirements, the automaker said. Tokyo-based Mitsubishi also said itÂ’s working on innovative technology, such as improved diesel engines, electric vehicles and autonomous driving. Its electric vehicles are a strength as environmental standards continue to toughen, especially in major markets like China, it said. But it warned the outbreakÂ’s impact on auto demand was worse than what the auto market suffered during the 2008 financial crisis and so a recovery will take time.

Mitsubishi pondering $2B share sale?

Mitsubishi makes the brilliantly fast, wonderfully fun Lancer Evolution. Outside of that road-going rally car, the rest of the range is pretty poor - the new Outlander isn't bad, but the subcompact Mirage looks like might've been competitive five years ago, while the Galant and Lancer have suffered from serial neglect.
This hasn't just lead to rumors of Mitsu's death in America; the subsidiary of the massive Mitsubishi Group has been in trouble at home, too. It was bailed out by three other Mitsubishi Group companies - Mitsubishi UFJ Financial, Mitsubishi Heavy Industries and Mitsubishi Corporation - between 2004 and 2005, according to Bloomberg. Now, it's attempting to extricate itself from "emergency mode," as analyst Koichi Sugimoto told the financial site, adding that "they're still in the very early stages of recovery."
As part of the bailout, Mitsubishi issued its three saviors billions of dollars of preferred shares, which don't have voting rights. The problem is, Mitsubishi hasn't issued dividend payments since 1998, and these stocks aren't exactly competing with Apple or Google, in terms of value. In other words, they're mostly worthless. With a public offering, Mitsubishi is expecting to raise 200 billion yen, or about $2 billion, in order to reduce the number of preferred shares. If all goes according to plan, it will wipe out preferred shares by March of 2014, or the end of fiscal year 2013.