Mitsubishi Electric will be appointing new directors, after a company-wide investigation found factories had been cheating on quality control tests for decades, and shipping transformers and other equipment which had not passed safety and performance measures.
An external investigation reported in April that results were falsified before products were shipped, and since then further investigation found the cheating took place in 70 percent of the company's Japanese factories, according to Nikkei Asia. This week, Mitsubishi Electric announced it has selected a list of fresh candidates as directors to push through reforms and improvements to the corporate culture.
Mitsubishi Electric CEO Takeshi Sugiyama resigned in July 2021, when the issue came to light.
Changes for the better (promised)
The company submitted to an external investigation in July 2021, and accepted a report in April 2022, which "revealed to the company that several inspections of transformers rated 22KV 2MVA or above manufactured at Mitsubishi Electric's Transmission & Distribution Systems Center in Ako, Hyogo Prefecture, did not fully comply with customer-requested testing standards that required compliance with the Japan Electrotechnical Committee (JEC), International Electrotechnical Commission (IEC), or Institue of Electrical and Electronics Engineers (IEEE) standards. The Investigative Committee also confirmed cases where improper statements were entered in inspection reports."
Since then, a further report showed the cheating was widespread, and this week, the company held a meeting of its Nomination Committee to put together a list of fresh director candidates, who will be proposed at a General Meeting of Shareholders on June 29, 2022.
Mitsubishi Electric says it halted shipments of the products when the issues were made known, and has been notifying customers of affected products. It is currently only shipping products whose inspections have been confirmed.
Apparently, the problem was raised internally and has not resulted in any complaints (or worse still, injuries) from customers. Mitsubishi has offered to carry out special inspections of the shipped products if needed.
Bleeping Computer provides a link to a series of releases from Mitsubishi Electric, which accept that the issue affects products including transformers rated for 22kV 2MVA or above - and has been rampant for some time.
For the transformer products, 8,363 products have been shipped from 1982 to March 2022 - and of these 3,384 were not tested properly. Of the potentially faulty products, around half were delivered within Japan and half were shipped abroad.
The cheating included deliberately carrying out dielectric tests at lower voltages than the standards required, and claiming in test reports to customers that the higher voltages had been used. These tests also produced false partial discharge measurements.
In other cases, factory tests found transformer temperatures and load losses were above the guaranteed minimum values - but false results were entered in the test reports.
The company is still waiting a final report on the full extent of the problems, and Mitusbishi has promised to cooperate with the investigation fully. The company is not expecting any change in earnings over the issue.
In the meantime, a company task force is attempting to create a new corporate culture. The company has updated its internal corporate slogan - from "Changes for the Better" - to "Changes for the Better start with ME".