The fuel-economy fraud, and joining Nissan (2016)

Choosing dependence on outsiders for the third time

The heart of this decision lies not in the fraud itself but in the speed with which, the moment it was exposed, the company barely considered rebuilding on its own and leaped straight for another firm’s capital. Phoning a rival’s chairman the day after the press conference and entrusting a 34% stake in a little over three weeks was a display of the decisiveness of Masuko, the chairman and CEO — and at the same time proof that the principals themselves had concluded Mitsubishi Motors could no longer rebuild trust and funds under its own power. The verdict that it had expanded its model line-up beyond its means was, turned inside out, a confession that it could not, on its own, make the choice to shrink to a size that fit.

Chrysler in 1971, Daimler in 2000, Nissan in 2016 — roughly every fifteen years, prompted by a slump or a scandal, Mitsubishi Motors has changed partners. What they share is that although the discipline of foreign capital or another firm brought money and control, it could not replace the disposition of holding inconvenient information inside. Under Nissan the cleanup of the fuel-economy fraud went forward, yet the more a company borrows its governance framework from another, the harder it is to grow the power to govern itself. This decision repeated, for the third time and in the shortest span yet, the cycle in which every choice of rescue thins the shoots of independence.