After being briefed by the company, the Committee discussed the following agenda: (1) The recall and improvement measures filed with the Ministry of Land, Infrastructure and Transport on April 12; (2) The Compliance Program for fiscal 2005; (3) The new internal communication slogans. The views expressed and recommendations made by the Committee are summarized below.

Recall and improvement measures filed on April 12

• After hearing what the company had to say, the Committee does understand the details of and process that led to the latest recall and improvement measure filing. However, the Committee remains deeply disappointed by this latest development in view of the company's announcement at the press conference on March 30 that it had brought the whole recall issue to a close. This latest recall would not be such a problem had the company been totally frank and disclosed at the press conference that there were still cases pending. It appears to the Committee that the company remains blasé about public reaction, despite all that has been done to resolve the situation to date. The company must treat public opinion with greater sensitivity.
• The Committee believes that the delay in the announcement of the latest recall was due to: (1) The protracted in-house investigation; (2) The company being slow to set the recall process into motion; (3) The considerable time required to procure the necessary replacement parts. Be this as it may, the Committee calls on the company to make every effort to shorten the process. In particular, because no customer should be exposed to the risk of an accident while replacement parts for vehicles subject to a recall are being procured, the company must file a recall as soon as the decision to implement post-market measures has been taken.
• At the same time, the Committee considers it right that the company has been totally candid in making recalls public even though the timing of such an announcement might not be ideal from the company's viewpoint.
• While awareness of the "Quality-first" and "Customer-first" internal slogans does appear to be reaching all levels of the company, the Committee asks the company to once again make a fundamental examination from the customer's viewpoint of all aspects of quality.
• The company is in the business of manufacturing vehicles that are driven on public roads. As such, it is vital that the company conduct exhaustive investigations to determine the cause of defects and other quality issues. In cases where the cause cannot be readily determined, the Committee recommends that the company implement interim measures immediately. The company will not regain the trust and confidence of customer and public alike unless it takes steps to inform customers about defects at the earliest possible date.
• Determining the cause of and developing remedies for defects requires more manpower. To this end, the Committee recommends that the company consider employing the knowledge and experience of retired employees.

Fiscal 2005 Compliance Program

• The Committee is happy to see that the 2005 Compliance Program makes the issue of covering up of defects its central theme.
• The Committee reminds the company that compliance is not simply a matter of moral training or ethics, nor one of simply observing and following laws and regulations. Rather, true compliance is about each and every individual in the organization adopting, as a matter of course, a more proactive stance in his or her work. The Committee believes that true compliance requires that an individual's mental approach and actions be based on the five principles of Orderliness, Tidiness, Cleanliness, Impeccability and Discipline.
• The Committee asks the company not to forget to give praise where praise is due.
• The Committee believes that to have its views standardized in a process that leads to improvements in the Employee Regulations will help to raise employee awareness about those views.

New internal communication slogans

• The Committee believes that the company's invitation to its workforce to submit proposals for internal communication slogans will help nurture a sense of unity among employees.

The fifteenth meeting of the business ethics committee has been scheduled for May.

Noboru Matsuda
Business Ethics Committee Chairman