Japan-wide scandal erupts over steel company's falsified data

Kobe Steel unleashed an industrial scandal that reverberated across Asia’s second-largest economy after saying its staff falsified data related to strength and durability of some aluminum and copper products used in aircraft, cars and maybe even a space rocket.

 

The Japanese company’s stock ended 22 per cent lower in Tokyo as customers including Toyota Motor, Honda Motor and Subaru said they had used materials from Kobe Steel that were subject to falsification. Boeing, which gets some parts from Subaru, said there’s nothing to date that raises any safety concerns. Rival aluminum makers gained.

 

Kobe Steel’s admission raises fresh concern about the integrity of Japanese manufacturers, and follows Takata misleading automakers about the safety of its air bags, and last week’s recall by Nissan Motor of cars after regulators discovered unauthorised inspectors approved vehicle quality. Kobe Steel said on Sunday the products were delivered to more than 200 companies but didn’t disclose customer names, with the falsification intended to make the metals look as if they met client quality standards. Chief Executive Officer Hiroya Kawasaki is now leading a committee to probe quality issues.

 

The fabrication of figures was found at all four of Kobe Steel’s local aluminum plants in conduct that was systematic, and for some items the practice dated back some 10 years ago, Executive Vice President Naoto Umehara said on Sunday. The comments were confirmed by a company spokesman.

 

Toyota said it has found Kobe Steel materials, for which the supplier falsified data, in hoods, doors and peripheral areas. “We are rapidly working to identify which vehicle models might be subject to this situation and what components were used,” Toyota spokesman Takashi Ogawa said. “We recognise that this breach of compliance principles on the part of a supplier is a grave issue.”

 

Kobe Steel said it discovered the falsification in inspections on products shipped from September 2016 to August 2017.