TOKYO -- Mitsubishi Motors Corp. said on Wednesday it would seek damages totalling 1.3 billion yen ($12 million) from three former presidents and four others for their roles in a defect cover-up scandal that has plunged the automaker into crippling losses.
The action is part of a series of measures taken after an investigation into the quality problems by a group including outside lawyers. Their report was submitted to the Transport Ministry on Wednesday.
The embattled automaker said it would also demand the return of up to half of the severance packages of 10 other senior officials. Those damages would total a maximum 350 million yen ($3.26 million) combined.
Mitsubishi Motors' decades-long practice of systematically concealing safety defects from authorities first came to light in 2000, and resurfaced last year when at least two road deaths were linked to hidden defects in trucks made by its then-unit, Mitsubishi Fuso Truck and Bus Corp.
"Over the last year, Mitsubishi Motors has faced a management crisis of unprecedented proportions," President Osamu Masuko told a news conference.
"With the submission of the final report to the (Transport Ministry) today, the company is confident it has brought to a close the recall issues that sparked off this crisis."
Mitsubishi Motors, Japan's only loss-making carmaker, had sought but failed to restore confidence in its brand under a new management team installed in April last year, and in late January assigned Masuko, a veteran of trading house Mitsubishi Corp. to lead the firm.
Among the seven former board members and executives targeted for the damages are Hirokazu Nakamura, Takemune Kimura and Katsuhiko Kawasoe, who served as president from 1989 to 2000.
In total, 157 directors, executive officers and auditors who had held posts since July 1995 were examined.
Kawasoe, along with a few other former executives, has also been indicted in a criminal case for his role in the fatal truck accident. He has pleaded not guilty.
Sales at Mitsubishi Motors have plummetted by double digits almost every month in its most important Japanese and U.S. markets since its brand suffered the fresh blow last year, forcing the company to seek a multi-billion-dollar bail-out from Mitsubishi group companies.
Masuko said confidence in the Mitsubishi brand had yet to recover 100 percent, but added sales were gradually improving in the tough domestic market. Sales were expected to total around 224,000 units in Japan for the business year ending this Thursday, against a forecast of 220,000, he said.
Mitsubishi Motors sold 359,000 vehicles in Japan in the previous business year and had originally forecast this year's sales at 300,000 units. It has forecast 2004/05 global sales of around 1.314 million units, down from 1.527 million units last year.
On Tuesday, Mitsubishi Motors said it would post a special loss of 70 billion yen ($652 million) at the consolidated level from compensation paid to DaimlerChrysler AG and 10 other companies, including Mitsubishi Heavy Industries Ltd., Mitsubishi Corp. and Bank of Tokyo-Mitsubishi for the fall in value of their stakes in Fuso.
Fuso, spun off from Mitsubishi Motors in 2003 and now owned 85 percent by DaimlerChrysler, is also suffering from plunging sales in Japan.