Slow Healing At Mitsubishi

It's clearing up sex-harassment charges, but ill will lingers

The allegations were almost surreal. At Mitsubishi Motors Corp.'s factory in Normal, Ill., female plaintiffs charged, male co-workers routinely groped and grabbed at them. Some women, they claimed, had to agree to sex to win jobs. Drawings of genitals, breasts, and various sexual acts were placed on car fenders, labeled with women workers' names, and run down the assembly line.

In the wake of such charges, aired first in a lawsuit by 29 women in 1994--and then last year by the Equal Employment Opportunity Commission (EEOC)--Mitsubishi vowed to clean up its act. It sent the factory's 4,000 workers through an eight-hour course in sexual-harassment awareness. Over the past year, the company created a unit to investigate harassment claims, and it hired a half-dozen female and minority executives. On Aug. 29, it agreed to pay an estimated $9.5 million to settle with 27 of the 29 women in the original suit.

Mitsubishi's troubles, though, are far from over. On Sept. 15, the EEOC plans to air new details of harassment experienced by the 330 women participating in its action, most of whom are still employed at the auto maker. It won't talk specifics yet but says that harassment persists. "We've spoken relatively generally about what we have meant by a hostile, abusive work environment," says EEOC lawyer John Hendrickson. "This will put a substantial amount of meat on those bones."

The EEOC suit could prove one of the costliest discrimination actions ever: Mitsubishi could pay $5 million and may be required to meet hiring and promotion goals for women, legal experts say. "Some of the conduct is so open and notorious--and not in dispute--that it makes it a tough case for Mitsubishi," says Marshall Babson, a partner at Ogletree Deakins, a Washington labor law firm. Mitsubishi has asked a judge in Peoria to dismiss the EEOC case. Failing that, it hopes to settle out of court. Meanwhile, it is negotiating with the two women remaining from the earlier action. Co-workers say they may have the strongest cases.

"CIVILITY." More telling, say many employees, Mitsubishi has yet to resolve profound cultural conflicts. Sexual harassment, they say, is generally on the wane, and Mitsubishi has acted on employee complaints about everything from day care to the cafeteria flatware. But tension persists on the factory floor. "We get called all the same things the women do," says a male worker. "This place needs civility for everyone."

For many in Normal, a quiet town of well-kept neighborhoods and cornfields 130 miles southwest of Chicago, Mitsubishi represents the best job opportunity around. State Farm Insurance Cos. employs more people, but the carmaker pays an average of $19 an hour, easily the most in town. As Mitsubishi has ramped up volume to counter massive U.S. losses, the Normal factory has increased production 54% since 1991, to 200,000 vehicles.

Because of the pay, few ever leave Mitsubishi. Yet many complain bitterly about their jobs. More than a dozen who spoke with BUSINESS WEEK--men and women alike--said they have been subjected to ridicule, often in sexually explicit terms, from U.S. managers, in front of their peers. Employees who object to such harassment, they add, are shut out of lucrative overtime opportunities or moved to undesirable shifts.

The repressive atmosphere has created wide skepticism about Mitsubishi's attempts to deal with the original harassment charges. "The people who were involved in that are still here," says one male worker. "Where's the change?" Indeed, workers say, five men who were dismissed last year for their involvement in the sexual harassment are routinely belittled by former supervisors for admitting their roles. And the EEOC claims that women suspected of joining its suit have become targets for retaliatory abuse. The company says it is investigating such allegations.

Mitsubishi acknowledges that it has received complaints of intimidation unrelated to sexual harassment but won't comment specifically. It still is addressing problems in its human resource systems raised by former Labor Secretary Lynn Martin, who was brought in to investigate the issues. There was no mechanism in place, for example, for workers to report instances of abuse. More important, Martin says, was a lack of communication between managers and line employees. Even now, she says, "part of what you are hearing on the lines and the floor is that residual of lack of trust for management. Mitsubishi didn't manage in a way that built trust."

DEEPER ISSUES. Although a new Japanese executive recently took over Mitsubishi's U.S. operations, the Normal factory's management team otherwise is nearly unchanged from two years ago. The United Auto Workers Local 2488, which represents about 3,200 Normal workers, says it will try to include mechanisms to identify harassment and address diversity issues when it negotiates a new three-year contract next July. But the union, too, has been faulted by employees for failing to act on the charges--a lapse the union blames on "poor record-keeping."

There are deeper issues at Normal, moreover, that may take years to work through. Mitsubishi, like other Japanese companies in the 1980s, sought out isolated, homogeneous communities for their U.S. manufacturing beachheads. Only recently, says Frank Cassell, a labor relations expert at Northwestern University's Kellogg business school, have such companies had to confront women and minority workers. Japanese executives, consumed with fixing the company's marketing problems, may have overlooked the aberrant reactions of their U.S. managers to such diversity. In Normal, the volatile cultural brew bubbles on.

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