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Monday, March 15, 2010

Koito executives step down and president take pay cut

The largest Japanese aircraft seats manufacturer Koito, who faked test data of its seats, said 3 executives will step down and its president will take a 30% pay cut for 6 months. They have submitted their plan to MLIT and intends to complete the first phase of safety check by end of May.

I am surprised that only 3 executives have to step down as a result of this! And the president is only taking pay cut of 30% for 6 months!? They should have replaced the whole management team! I don't know if Koito will ever recover from this. JAL and ANA might still order seats from them but how about 30 other airlines who are also affected by this safety problem?

So we probably won't know how this is going to affect JAL until end of May. I don't know why this is taking so long. If JAL's 744 and MD-90 fleets are affected, by the time Kioto actually fixed the seats, JAL might be ready to sell the planes off to other people. So that might means fix the seats/replaced faulty components and then a few weeks later throw away the entire seat if the new owner decides to redecorate the interior LOL

By the way thanks William for sending me this article.

Source: Bloomberg

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