Nissan CEO to scrap Mitsubishi deal if fuel scandal widens
YOKOHAMA, Japan – Nissan's top executive warned Friday, May 13, that he would kill a $2.2 billion offer to buy a major stake in Mitsubishi Motors if its fuel-economy cheating scandal spreads beyond Japan.
The country's number two automaker threw a surprise lifeline to Mitsubishi on Thursday, May 12, by offering to buy 34% of its shares, in a deal that would give Nissan effective control over the smaller firm.
But the deal will be dead if Mitsubishi was not being honest about claims the cheating was limited to cars sold only in its home market, Nissan's chief Carlos Ghosn said.
Japanese authorities are to release a report on an investigation into the matter this month, which is expected to lay bare more details about the cheating.
"We have today a memorandum of understanding. The deal will come after [we do] due diligence," Ghosn told a roundtable of international media.
"There is no problem in the US, in Europe – soon we are all going to know about that. So when we will have to conclude the deal we will know exactly what is the situation.
"I don't think there is any doubt that if there is any implosion...we won't do the deal," he said in response to questions.
Mitsubishi last month admitted it had been falsifying fuel-economy tests for years, manipulating data to make cars seem more efficient than they were in reality.
The scandal – reported to cover almost every model sold in Japan since 1991 – also includes mini-cars produced by Mitsubishi for Nissan as part of a joint venture.
It was Nissan that first uncovered problems with the fuel economy data, but Mitsubishi has said Nissan had no part in the cheating.
Ghosn said Friday that Nissan would try to help Mitsubishi restore its tattered reputation.
"This is a serious issue. There is a breach of trust and this is the responsibility of [Mitsubishi]. We are going to support them."
Mitsubishi was pulled from the brink of bankruptcy a decade ago after it was discovered that it covered up vehicle defects that caused fatal accidents.
At the time, the Mitsubishi group of companies stepped in with a series of bailouts to save the firm. – Rappler.com