Suzuki CEO Announces Resignation Over Testing Scandal, Puts End To His Dynasty Enduring 37 Years

Osamu Suzuki, patriarch for Suzuki Motor Corp., has announced on June 8 stepping down from the position of chief executive. One of the longest serving leaders in the automobile industry is going to resign following his admission of major flows in its fuel efficiency test. Meanwhile, the 9^th largest automaker in the world has committed cutting executive pay while slashing bonuses for 2015 centering the testing scandal.

Osamu Honda, executive vice president and chief technical officer of Suzuki will also retire from his existing positions. However, he has been assigned with the new responsibility for research and development team, which remains at the heart of the testing scandal. New CEO will be selected from the incumbent board members on June 29 after Suzuki Motor’s annual shareholder meeting, reports Reuters.   

The step down decision by Mr. Suzuki paves the way for handing over the power to his son, proceedings for which have been initiated well before testing scandal. However, Mr. Suzuki is the second chief in the Japanese auto industry to resign following the scandal. Prior to that, president of Mitsubishi Motor Corp. has announced resignation following admission of his company to manipulate data while applying an unauthorized testing method in some models for 25 years, according to a report published in The Wall Street Journal.

After admission from Mitsubishi and Suzuki for adopting unfair means has compelled smaller industry rivals like Olympus Corp. and Toshiba Corp. to acknowledge applying similar fraudulence. New corporate governance rules have failed to regulate a cozy and often secretive corporate culture, alleges some investors.

The 86 year old automobile veteran has once again sought apology for the troubles caused by his company while addressing a press conference on June 8. Though he has announced for stepping down as CEO, but he will remain chairman in a bid to fulfill his responsibility to prevent further recurrence of such problem. Notably mentioning, his decision for stepping down needs to be approved by the shareholders during their annual meeting scheduled on June 29.  

Mr. Suzuki, the fourth adopted son-in-law of company founder Michio Suzuki, has been leading its management since 1978. The fourth Japanese automaker by sales volume, has acknowledged not collecting fuel efficiency data using a legally approved method through a report to the transport ministry during last month.

As per the existing Japanese regulation, automakers need to gather fuel data of vehicles while rolling on road amid air resistance. But Suzuki has collected data from laboratory style testing of individual components like tires, brakes and transmissions, reports The Japan Times.

Suzuki claims for not deceiving the customers. Since the automaker’s testing site is located near the ocean, so it has failed to record consistent data due to sudden change in wind force, argues Suzuki in favor of its claim. Though around two million vehicles have been tested through improper method, but their fuel efficiency figures have hardly changed during further tests using proper methods, adds the automaker to its claims.

Meanwhile, the Shizuoka based company has vowed not to repeat same mistakes in the future. It has also committed strengthen efforts to train up own engineers on legal compliance. The auto giant’s commitments also include improve its test facility to get more consistent data through developing infrastructure.   

In its efforts to help in ongoing probe conducted by the Japanese transport authority, the automaker has reiterated its commitments to encourage whistle blowing. Suzuki and Mitsubishi have discovered themselves in the midst of fuel efficiency test scandal following admission of applying defeat device for the last two years by Volkswagen AG to deceive diesel emission tests in the US. Following the admission, auto makers from all over the world have come under scrutiny over mileage and emissions data by the regulators.