Twenty years of dodging recalls has driven Mitsubishi Motors into the arms of DaimlerChrysler.

Last week the government of Japan formally filed criminal charges against the country’s fourth largest automaker after a raid of company headquarters -- plus an admission by Mitsubishi -- disclosed that the company had knowingly concealed some 64,000 customer complaints since 1977 to avoid recalls. None of the defects has been know to cause any deaths, although some media reports say they may have caused several accidents in Japan.
The scandal prompted an executive reshuffling at Mitsubishi and a rework of DaimlerChrysler’s deal to buy 34% of the company. Under the new terms, DaimlerChrysler will pay $1.9 billion for its share of the company, about 10% less than previously agreed on. Mitsubishi also dropped a contract clause limiting DaimlerChrysler ownership for 10 years. The U.S./German automotive giant now has the option to buy an unlimited stake in Mitsubishi after three years. The sale is expected to close in October.
Mitsubishi President and CEO Katsuhiko Kawasoe will resign his position effective Nov. 1 and become a non-executive board member. His successor will be Takashi Sonobe who currently serves as head of international operations. But much of the power will go to DaimlerChrysler executive Rolf Eckrodt, who takes a new seat created on Mitsubishi’s board of directors and a new position within the company, chief operating officer. Eckrodt, currently head of DaimlerChrysler’s rail systems subsidiary Adtranz, will be responsible for Mitsubishi research and development, production/quality, procurement, marketing and sales. DaimlerChrysler says it will also “allocate additional know-how and management capacity to Mitsubishi Motors by dispatching highly experienced specialists and managers.”
With DaimlerChrysler in charge, many hold out little hope for successful implementation of the Volvo/Mitsubishi truck union. Volvo reportedly wants to increase its 19.9% stake in a new Mitsubishi Fuso Truck and Bus Company to be created next year, but industry analysts say DaimlerChrysler would oppose such a move. A Volvo spokesman told Reuters news service that DaimlerChrysler’s ownership is “a complication” but Mitsubishi has given them assurances that they can honor the deal.