Mitsubishi to Compensate DaimlerChrysler

Mitsubishi Motors said Tuesday it had agreed to compensate DaimlerChrysler for losses on investments in its truck business hit by a series of defect cover-ups, as the Japanese automaker sank deeper into the red. Mitsubishi Motors Corp. said it would make a cash payment and transfer its remaining 20 percent stake in Mitsubishi Fuso Truck and Bus Corp. to the German-US car giant under an agreement expected to be made final in March. The amount of the cash compensation has yet to be finalized, a Mitsubishi Motors spokesman said, although it was estimated by Japanese media at some 20 billion yen ($190 million). The associated transfer of the shares would bring DaimlerChrysler AG's stake in the truck and bus maker to 85 percent. DaimlerChrysler had acquired from Mitsubishi Motors a 65 percent stake in Mitsubishi Fuso for about 140 billion yen by March 2004, but soon afterwards Mitsubishi Fuso's past defect cover-up attempts were disclosed. Claiming the scandal greatly eroded the value of its investment in Mitsubishi Fuso, DaimlerChrysler notified Mitsubishi Motors last June it was considering demanding compensation based on a clause in the stock transfer agreement.