Saturday, April 7, 2018

Mitsubishi Cables and 2 Other Suppliers Drag Mitsubishi’s Sales Down With Falsified Data (2017)

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In 2017, Mitsubishi Cable came out admitting that they had been falsifying data for their rubber sealants since April of 2015. In this time period, over 270 million vehicles were sold to 229 separate dealers (Reuters). Interestingly, They were still faking data even after admitting this fact for almost a month. In defense, Mitsubishi states that they have not found any legal or safety issues in regard to the current problem (Newser). This still left many aircraft companies including Boeing and Airbus scrambling to confirm whether this false data was deemed unsafe for use. Mitsubishi has also been struggling with another scandal including more falsified data for brass and copper parts which were bought by 29 different industries. This ties into the Kobe Steel scandal since Mitsubishi is a customer of Kobe. They also have a joint venture together to produce copper tubes. With these problems, this makes Mitsubishi look untrustworthy to customers (CNN).
Japan Trade Minister on New Mitsubishi Scandal
Mitsubishi Cables started an investigation in February of 2017 when they realized workers were faking data. The investigation continued until October, but they were still assembling the rubber into the vehicles. They stopped shipping on October 23 to fix the problem completely. These parts were mostly distributed in Japan, but others could have been brought to China and America. Shares of Mitsubishi in Tokyo dropped only 1 percent. They lost 400 million dollars on just the marketing value, but the units affected only 525 customers. Out of which, 484 clients have mentioned there is no negative effect on the falsified data (Bloomberg). This increases the values of their stocks, but not by much. 
Even if Mitsubishi Cables had a small impact on their vehicles sold, it does not help as Mitsubishi still has to deal with 2 other large scandals that has their name on it. One, as mentioned above, is the Kobe Steel scandal. The other deals with Mitsubishi Aluminum Co, who gave the 'OK' to install products that did not pass regulation standards. This was also quickly fixed as customers confirmed that it had limited effects on the vehicle and it was still deemed safe. This investigation did not see anything that would raise the possibility of legal violations or safety issues (Fox6Now). Since Mitsubishi is a customer that was affected by the Kobe Steel scandal, they were indirectly punished since their sales and stock went down. Somehow Kobe fixed the main issue and started selling again, almost making a comeback by bringing their sales up rapidly back to what they were before the fall. This in turn helped Mitsubishi sell more vehicles, although they are still not back to their original sales values or profit (The Japan Times).
The key stakeholders of this small scandal starts with the company Mitsubishi Cables as the rubber manufactures. This is the company producing the rubber parts that do not pass specified regulations. This process was overlooked by workers on the manufacturing floor who assemble the parts into the vehicles. It was also overlooked by the officials at the Mitsubishi Headquarters which are other stakeholders. These people did not want to fix the problem or admit that they had a problem that would stop production until it was fixed, which would cost a lot of money. Mitsubishi dealers are other stakeholders even though they may not know about the falsified data, they are still selling the affected vehicles to consumers. These consumers are the last stakeholder and may be unknowingly buying a 'defected' car or one with recall soon to be addressed.
Mitsubishi's Tokyo Headquarters
From the individualist standpoint, they believe legal business actions maximize profits of the owners. In this case, Mitsubishi Cable would be considered unethical since they knowingly passed parts that did not pass regulation which is honorless. Not only that, but not announcing that the rubber data used in vehicles was falsified, they are letting their customers buy these vehicles without telling them parts of the car have parts with fake results. This action was not in the best interest of the new owners of the cars. Before Mitsubishi controversies, consumers liked this brand as their products were reliable and fair priced. After these scandals, consumers think twice about buying from Mitsubishi since they have no idea if they will be lied to or sold parts lied about. Mitsubishi should have taken the time to announce their problem and fix it before selling again as they would have kept the trust of their clients, and they would have saved money.
Kantianism supports the idea that one should make actions that honor and respect others choices. In this example, Mitsubishi Cable would be deemed unethical since they lied to their customers and to Mitsubishi that their rubber fittings passed regulations. They also did not fix the problem until after the investigation, selling potentially faulty cars to customers in turn cheating them of a quality product. If they were to conform to Kant's theory, they must announce what is wrong the very second they are aware of a future problem, so they can inform the people who want to do business with them. They should also look for a solution as fast as possible updating the public as they go, whether it is a simple problem or a complex problem. In doing this, they would have the full trust of their customers since they believe the company cares for the products they sell and it must be of high quality work and assurance. 
Utilitarianism supports the idea that all all people involved should be satisfied and happy, regardless of what else comes up. In this case I believe Mitsubishi Cables is supported by Utilitarianism since it was easier to just let the problem go then try and fix it when they first knew about it. All parties were happy since there would be much less work to do at the moment, and no systems would have to be changed. For example; Mitsubishi Cables and their workers would not have had to change anything or any of their systems for a new rubber material, instead they just run with what they have and keep quiet. The workers on the manufacturing floor would not have to wait for a new shipment of the correct rubber parts, so work never slowed down. The head honchos at Mitsubishi Headquarters do not have to announce how they messed up and try to figure out how to fix the problem quickly which saves them the humility of the situation. The dealers have no change since they did not know of the problem, but if they did it would not matter since the rubber parts have no negative affect. Finally the customers may lose trust in the brand knowing they were lied to even though the material is safe.
Virtue Theory
The last theory is the Virtue Theory, which supports the idea that someone’s full potential is being used for the right reason. It uses four characteristics; courage, honesty, temperance and justice. In this case Mitsubishi Cables is unethical according to the Virtue Theory because their full potential was not used. Instead, they resulted to laziness and the fear of being embarrassed, which they were once the word got out if not even more. Their courage went out the door as soon as they decided against publishing their problem to the public. Their honesty was tampered when the workers and head operators decided to not tell anyone they had a problem with the results of rubber seals and other parts. They did not show temperance when they decided to keep selling these falsified result vehicles, and the did not show justice as they were not being fair or reasonable keeping this information from their clients. If they were at their full potential, they would have found this problem of a non spec material being used, and fixed it as fast as they could in order to be fair to their customers and keep production going with minimum delay and embarrassment.


Gidman, Jenn. “Mitsubishi Has a New Scandal on Its Hands. It Adds to Japan's Larger Corporate Issue.” Newser, 24 Nov.                      2017
IYENGAR, RISHI. “Japan's latest scandal: Mitsubishi admits faking data.” WDIV, CNN NewSource, 23 Nov. 2017 
“Mitsubishi admits faking data.” FOX6Now.Com, 24 Nov. 2017 
“Mitsubishi joins list of major Japanese companies rocked by scandals.” The Japan Times, 24 Nov. 2017,                                
Nussey, Sam, et al. “Mitsubishi Materials says over 200 customers could be affected by...” Reuters, Thomson Reuters,                           1 Dec. 2017
Ujikane, Keiko, and Masumi Suga. “Fake Data Scandal Hits Another Japanese Manufacturer.”, Bloomberg,                   23 Nov. 2017

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