Frequently asked questions

What happened to prompt Mitsubishi Electric to launch this investigation and reform program?

Following the discovery of improper inspection practices of air conditioning equipment for railroad vehicles (announced on June 30), an Investigative Committee of external experts was formed to look into the non-compliance of third-party certification of electromagnetic switches manufactured by the company’s Kani Plant of Nagoya Works and the improper inspection practices of air conditioning equipment for railroad vehicles. As part of the investigation, the Investigative Committee has been tasked to look more broadly at quality-related improper practice at Mitsubishi Electric.

On October 1st, 2021, the Investigative Committee announced interim findings and the Mitsubishi Electric Board of Directors discussed and approved the company’s plan for reform. This plan focuses on three areas of reform: (1) quality assurance, (2) organizational culture and (3) governance. It will also look at preventive measures for recurrence of these issues.

Mitsubishi Electric would like to reiterate its sincere apologies to all customers, valued stakeholders, and broader society for the impact of these incidents.

The work of the Investigative Committee is on-going and so too is the reform program; it will be reviewed and refined over the coming months and years.

What is the scope of your investigations? Who was responsible for conducting them?

On July 2, 2021, the company established an Emergency Response Division headed by the CEO and an Investigative Committee chaired by an external attorney. The Investigative Committee was tasked with investigating the improper inspection practices concerning HVAC for railcars and other products for railcars manufactured at Nagasaki Works, the discrepancies found in third-party certifications and registrations of electromagnetic switches manufactured at the Kani Plant of Nagoya Works, which had been discovered prior to the commission of the investigation, as well as investigating the facts and determining the causes of any other improper incidents at a company-wide level, and formulating and recommending measures to prevent recurrence.

The Investigative Committee began by conducting a survey of all employees in Japan. Subsequently, at Kani Plant and Nagasaki Works, the Committee carried out interviews and inquiries with relevant parties, conducted forensic investigations into executives and other relevant parties at these sites, as well as verifying the consistency of responses to the survey with objective data sources.

The company will continue the investigations at the Kani Plant and the Nagasaki Works, and in addition to measures developed based on the results of these investigations to prevent recurrence at each individual site, the company recognizes the need to develop systems and measures to address quality, organizational culture, and governance issues at a company-wide level.

What are the findings of the investigation?

The investigation identified a number of direct causes for the issues at the Kani Plant and the Nagasaki Works, as well as more general underlying factors. These are summarized in the following update: Investigation Background.

How is the Company addressing these issues?

We are committing to pursuing serious reform within Mitsubishi Electric in three core areas to address the issues that have been identified thus far in the investigation into practices at some of our production facilities. These are:

  1. Overall governance of the company. As part of its efforts to strengthen the company’s management oversight functions and to realize sustainable and mid to long term growth of corporate value, Mitsubishi Electric will push forward with reform of the Board of Directors. Furthermore, a Governance Review Committee will be established to identify problems and provide improvement recommendations as part of efforts to assess the company’s internal control and governance system.
  2. Organizational culture. As part of the company-wide reform project “Team Sousei”, Mitsubishi Electric will invite employees who have ideas on reforms to join the team and come up with specific proposals for the formulation of an action plan to create a new Mitsubishi Electric. At the same time, the company will reform the human resources system by breaking down the closed organizational culture, reforming the management team itself, and supporting middle management and front-line workers.
  3. Quality assurance. A dedicated Corporate Quality Assurance Reengineering Group will be established reporting to the CEO and will be responsible for establishing a new quality assurance system that is headquarters-led, sharing knowledge and providing flexible support across business units, and making drastic changes without being bound by norms through the appointment of Executive Officers from outside. Company-wide measures will be implemented to reconstruct the control function, address technology and resource issues, re-foster an awareness of quality compliance.

Are the impacted air conditioning units dangerous? Do they present a risk?

The company is not aware of any safety issue, accident or other incident attributable to this matter. As we determine that any specific tests affected customers, Mitsubishi Electric has been communicating directly with them. We will continue inform customers as it is determined that their specific products are impacted.

Which companies, countries and machines use the impacted machinery?

We are not able to disclose this information at this time. As we determine that any specific tests affected customers, Mitsubishi Electric has been communicating directly with them. We will continue inform customers as it is determined that their specific products are impacted.

What are the future plans and how often will the company update on progress of further investigations and the reform program?

The investigation into quality practices at all of the company’s manufacturing facilities (all 22 facilities) is anticipated to conclude by April 2022, and the company will report roughly every three months on the findings of the investigation and progress on the steps the company is taking. The company aims for the investigation to end by April 2022 and will proceed with investigations into its group companies. If, in the course of future investigations, issues that need to be publicly announced are identified, the company will promptly address those issues including appropriate disclosure to stakeholders, regardless of the anticipated schedule as above.

How long do you expect the reform program to take?

This is a multi-year program of reform which will evolve further as our investigations continue and as we move through the reform process.

Planned Reforms

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