Suzuki mpg scandal prompts CEO resignation, executive pay cuts

Suzuki mpg scandal prompts CEO resignation, executive pay cuts

Suzuki chief executive Osamu Suzuki and executive vice president Osamu Honda have resigned as the company continues to deal with a fuel-efficiency scandal.

The departures come just days after Japanese authorities raided the automaker’s headquarters, investigating discrepancies in mpg and emissions estimates for a range of models sold in the country.

Suzuki has admitted to using an unauthorized method to estimate driving resistance, a key variable in establishing mpg ratings. Rather than using a coasting test, as called for by regulations, the company calculated the combined resistance of vehicle components.

Aside from the resignations, the automaker has also outlined significant pay cuts across its entire top ranks. Bonuses for 2015 will be eliminated for directors and halved for senior managing officers, while monthly compensation will be cut by up to 40 percent.

“The change of Representative Directors and reduction of compensation for management is to clarify the responsibility of the management against the improper conduct in application of driving resistance, different from regulations by the Ministry of Land, Infrastructure, Transport and Tourism,” the company said in a statement.

Japanese regulators have not yet announced results of the ongoing investigation.

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